(qlmbusinessnews.com via bbc.co.uk – – Mon, 2nd Aug 2021) London, Uk – –
Defence and aerospace firm Meggitt has agreed to a £6.3bn takeover by US firm Parker-Hannifin, which has promised to protect Meggitt jobs in the UK.
Coventry-based Meggitt employs more than 9,000 people at 39 sites worldwide, including 2,300 in the UK.
It specialises in components for the aerospace, defence and energy industries. Companies that it supplies include Airbus and BAE Systems.
Parker said it was “committed to being a responsible steward” of Meggitt.
It added that it was pleased that the deal had the full support of Meggitt's board.
Parker said it would maintain Meggitt's product engineering and manufacturing staff levels in the UK, while increasing the number of apprenticeships by 10%.
The offer for Meggitt, which is listed on the FTSE 250 index, values the company at 800p a share. That represents a 70% premium on Meggitt's closing share price on Friday, which was 469.1p.
The takeover announcement sent its share price soaring nearly 60% in Monday trading to 742.3p.
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“During our long-standing presence in the UK we have built great respect for Meggitt, its heritage, and its place in British industry,” said Tom Williams, chairman and chief executive of Parker-Hannifin.
Parker, which already employs 2,000 people at its own UK sites, has said it is committed to keeping Meggitt's headquarters in Coventry.
It will also continue to honour Meggitt's contractual obligations with the Ministry of Defence, ensure that the majority of the board are UK nationals and increase research and development spending in the UK by 20% over the next five years.
Sir Nigel Rudd, chairman of Meggitt, said: “Meggitt is one of the world's foremost aerospace, defence and energy businesses, leading the market with a strong portfolio of technology and manufacturing capabilities, and holding a significant amount of intellectual property.
“Whilst Meggitt is currently pursuing a strong, standalone strategy which will deliver value to shareholders over the long-term, Parker's offer provides the opportunity to significantly accelerate and de-risk those plans, while continuing to deliver for shareholders.”
News of the deal comes six days after the government said it was “closely monitoring” the proposed takeover of another UK defence firm, Ultra Electronics, by a US private equity-owned company, Cobham.
Ultra Electronics, a major supplier to the Royal Navy, has said it is “minded to recommend” the £2.6bn bid, subject to other terms, including assurances over national security.
