The £6.7bn takeover of defence contractor Meggitt PLC (LSE:MGGT) by Parker-Hannifin Corporation (NYSE:PH) will be investigated by the City watchdog on the grounds of national security after being referred by the UK government.
Business Secretary Kwasi Kwarteng referred the recommended acquisition to the Competition and Markets Authority overnight.
The minister of the Department for Business, Energy and Industrial Strategy (BEIS) has the power to intervene in mergers on public interest grounds relating to national security, a responsibility discharged in a quasi-judicial capacity.
Kwarteng acted on official advice, a statement from the department said.
The CMA will provide a report on the proposed transaction by midnight at the end of 18 March 2022 to the Business Secretary.
Meggitt said in a statement on Tuesday that it continues to expect that the acquisition will complete in the third quarter of 2022.
The FTSE 250 company's board has recommended the 800p-per-share offer by Parker-Hannifin, rebuffing a 900-per-share approach by aerospace group Transdigm, which later walked away.