The UK Business Secretary has indicated he is unlikely to block the acquisition of defence company Meggitt PLC (LSE:MGGT) by American aerospace corporation Parker-Hannifin Corporation (NYSE:PH) on grounds of market competition or security.
“The Secretary of State for Business, Energy and Industrial Strategy is minded to accept legally binding undertakings offered in the proposed acquisition of Meggitt,” Kwasi Kwarteng said in a statement today.
Two separate public consultations were launched yesterday into the US aerospace corporation's proposed £6.3 billion acquisition of Meggitt, which supplies aircraft engines and ammunition controls to the military, to address issues of national security and competition concerns.
Following the consultation, conditions could be put in place to ensure the buyer will honour Meggitt’s existing contracts, such as the provision of parts for the RAF Typhoon fighter jet, that it maintains contact with the Ministry of Defence, and that a majority of Meggitt’s board remains British, the department said.
The Secretary of State issued an intervention notice in October to halt the deal on grounds of national security, which was followed by a competition review.
Kwarteng holds powers to intervene in mergers in the interest of national security under the Enterprise Act 2002.
His latest statement today follows advice sought from the Ministry of Defence and Competition and Markets Authority.
European authorities cleared the deal in April.
Shares in Meggitt were up 0.56% after midday trades.