The £8bn deal received the backing of 52% of GKN shareholders last week but some politicians, unions and clients have raised concerns about national security given the engineer's work with the UK’s Ministry of Defence.
Government reviews deal
Business secretary Greg Clark said the government is reviewing whether the deal raises public interest concerns.
He told BBC Radio 4's Today programme he would not give a view on the Melrose deal until he has considered all the evidence of the government's assessment.
Melrose specialises in buying troubled industrial companies and selling them on for a profit.
Labour has accused Melrose of being a “short-termist asset-stripper" and criticised the group’s deal to buy GKN.
Clark has asked Melrose to take a long-term approach to its investment in GKN to protect its interests in UK defence.
In response, Melrose has promised to keep the company headquarters in the UKI, maintain current levels of research and development spending and to not sell GKN for five years.
Melrose insists GKN takeover won't jeopardise national security
Former defence secretary, Lord Heseltine, said the deal should be blocked on national security grounds. He added that "no other country of our sort would have allowed this to happen".
Melrose chief executive, Simon Peckham, hit back at accusations his takeover of GKN could hurt national security.
“We are all British,”he said, referring to himself and his three directors.
“We live here and our families live here. We are a British company taking over another British company. We are as concerned about national security as anyone else.”
Deal puts UK takeover rules in the spotlight
The deal underlines the UK’s weak takeover rules that make companies easier acquisition targets.
Last month Unilever plc (LON:ULVR) chose Rotterdam over London for its main headquarters as it would be at less risk of a hostile takeover after fending off an unsolicited approach from Kraft Heinz Co. (NASDAQ:KHC).