UK govt 'minded' to approve Meggitt takeover

The UK government has indicated it is likely to accept the £6.3bn takeover of the domestic defence company Meggitt by American industrial outfit Parker Hannifin.

The US conglomerate on Wednesday said it expected to complete the takeover within the next two months after UK business secretary Kwasi Kwarteng gave the green light.

Meggitt makes parts for the F-35 fighter jet and the A400M transporter, both used by the UK military, as well as civilian aircraft made by Airbus and Boeing.

It is the second mega-deal waved on by Kwarteng in a week. US private equity firm Advent’s £2.6bn takeover of Ultra Electronics, which provides kit for nuclear submarines, has received preliminary assent.

The UK government on Tuesday said the business secretary was “minded to accept undertakings offered by Parker Hannifin to address the concerns” it had on national security and competition grounds.

Parker has agreed to honour existing contracts with the UK Ministry of Defence, retain a majority of UK nationals living in the UK on Meggitt’s board, and make sure some military technology remains in the UK.

In May, Parker sold off its aircraft wheel and brake division to a US rival in order to satisfy European competition regulators. The UK confirmed that the divestment was also necessary to meet its conditions.