Meggitt takeover poised for green light with Kwarteng ‘minded to accept’

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails

Sign up to our free breaking news emails

Please enter a valid email address

Please enter a valid email address

SIGN UP

I would like to be emailed about offers, events and updates from The Independent. Read our privacy notice

The £6.3 billion takeover of British aeroplane parts maker Meggitt by a US rival looks set to get the go-ahead after the UK Government said it was “minded” to accept measures to address competition and national security concerns.

The Department of Business, Energy and Industrial Strategy said late on Tuesday that Business Secretary Kwasi Kwarteng was poised to accept Meggitt suitor Parker-Hannifin’s “legally binding undertakings”.

But it has launched a public consultation and will wait until that ends on July 13 before making a final decision.

It is set to pave the way for another US takeover of a UK firm, after Mr Kwarteng last week said he was minded to accept the £2.6 billion takeover of defence business Ultra Electronics by private equity-owned Cobham.

Tom Williams, Parker-Hannifin chairman and chief executive, said: “We are pleased that following very constructive engagement with the UK Government, the Secretary of State is minded to accept the national security and competition undertakings we have offered as part of our pending acquisition of Meggitt.

“The combination of Parker and Meggitt is an exciting opportunity for both companies and we look forward to welcoming Meggitt to the Parker team.”

Meggitt agreed a deal last year to sell itself to Parker-Hannifin.

The deal was approved by the EU Commission, with some conditions, but the UK opened an investigation over national security concerns, given that the business has major defence contracts.

Tracing its roots back to a company that produced equipment for hot air balloons in the 1850s, Meggitt now supplies parts for both Boeing and Airbus and its brakes are used by militaries.

Parker-Hannifin said in May it had agreed to sell its aircraft wheel and brake division to industrial machinery maker Kaman Corp to help address UK competition concerns.

The UK Government also said that Parker has pledged to honour its existing contracts to its defence ministry and agreed to protect sensitive government information in Meggitt.

Parker said it will continue to engage with the Government and competition watchdog and still expects to complete the deal in the third quarter.