Meggitt says US takeover will go ahead despite UK government intervention
The British aerospace manufacturer Meggitt said it was confident its £6.3bn takeover by a US rival would go ahead, after the business secretary, Kwarsi Kwarteng, intervened in the deal over national security concerns.
Kwarteng referred the proposed acquisition of Coventry-based Meggitt by Parker-Hannifin to the Competition and Markets Authority on Monday, saying it was in the public interest. “The UK is open for business. However, we will take steps to protect our national security when necessary,” he said.
Meggitt, a FTSE 250 engineering company that operates in the aerospace, defence and energy markets, said in a brief statement on Tuesday that it looked forward to “engaging constructively” with the competition regulator on its review.
The company continues to expect that the acquisition will complete in the third quarter of 2022, it said.
The acquisition of Meggitt, which is a defence supplier to the UK government and provides components for US F-35 Lightning II fighter jets, would almost double Parker’s aerospace operation.
Parker-Hannifin agreed to buy Meggitt in August and made a series of legally binding commitments, including keeping the company’s UK headquarters in Coventry and protecting jobs in research and development, product engineering and manufacturing operations. However, jobs in other areas are not protected. Meggitt employs about 2,000 people in Britain.
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A Parker-Hannifin spokesperson said: “We look forward to engaging with the UK government on the PIIN [public interest intervention notice] process and bringing the review of the transaction to a satisfactory conclusion.”
Rival US suitor TransDigm pulled out in September, citing doubts that it would be able to make a sufficiently high return on its investment.
A string of recent takeovers of UK companies by overseas rivals and private equity firms have triggered concerns about the threat to the UK economy and its ability to compete. Nvidia’s planned $40bn (£29bn) acquisition of the Cambridge-based chip designer Arm is the subject of an in-depth investigation, after the CMA found the deal raised serious competition concerns.