Business

Ministers intervene in £6.3bn Meggitt takeover ‘to assess any national security concerns’

The government has intervened in the £6.3bn takeover of UK defence and aerospace technology firm Meggitt to assess national security concerns.

Shareholders last month voted to back the acquisition of Meggitt by US rival Parker-Hannifin, after the deal was agreed by the UK group’s board in August.

But Business Secretary Kwasi Kwarteng has now issued a “public interest intervention notice”.

Mr Kwarteng wrote on Twitter that he had asked officials at the Competition and Markets Authority (CMA) “to assess any national security concerns”.

“The UK is open for business, however we will take steps to protect our national security when necessary,” the business secretary said.

Under the takeover deal, Parker has committed to keep Meggitt’s UK headquarters in Coventry and maintain the workforce involved in research and development, product engineering and direct manufacturing.

It also said it would increase by at least 10% the number of apprenticeships.

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But the agreement also states that while safeguarding investment in these areas, Parker “sees the benefit of reviewing the ways in which the operations of the combined group can be further improved, which may impact employment roles within the organisation”.

The government’s intervention requires the CMA to submit a report on the deal by 18 March.

A Parker-Hannifin spokesperson said the company looked forward to engaging with the government and “bringing the review of the transaction to a satisfactory conclusion”.

“We continue to expect that the transaction will close in Q3 2022 and will not offer any further comment on regulatory processes,” the spokesperson said.

In recent months, the government has also ordered similar interventions into the takeovers of British defence firm Ultra Electronics by US-owned rival Cobham and the $40bn sale of chip designer Arm Holdings to America’s Nvidia.

The Arm deal is now the subject of an in-depth probe after the CMA found that it could weaken rivals and stifle innovation.

Meanwhile, in July, Boris Johnson ordered a review of the sale of UK chip manufacturer Newport Wafer Fab to Chinese-owned Nexperia.

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