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Meggitt Shares Tick Higher After Britain Says Parker Takeover Deal Worries Allayed

Stock Markets Jun 29, 2022 05:46AM ET
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© Reuters.

By Scott Kanowsky 

Investing.com -- Shares in Meggitt PLC (LON:MGGT) edged higher on Wednesday, boosted by an announcement from the British government that it is now open to giving the green light to a £6.3 billion takeover bid of the U.K. aerospace firm by rival Parker Hannifin Corporation (NYSE:PH).

In a regulatory update, Britain said Business Secretary Kwasi Kwarteng is "minded to accept" concessions offered by U.S.-based Parker to address national security and competition concerns around the purchase. However, Kwarteng will not make a final decision on the deal until a public consultation period finishes on July 13.

The government added that two separate official investigations into competition and national security worries have been launched, as some of Meggitt's biggest clients include the U.K. Ministry of Defense (MoD), Boeing (NYSE:BA), and Rolls-Royce (LON:RR).

Parker's chief executive Tom Williams said he was "pleased" by the government's announcement, describing talks with U.K. officials as "very constructive". The company agreed to several concessions to smooth over potential concerns, including a promise to maintain its commitment to Meggitt's existing MoD contracts and protective sensitive information. Competition concerns were also allayed by Parker's sale of its Aircraft Wheel and Brake division in May, Britain said.

The takeover also won antitrust approval from the EU in April after it vowed to sell a factory in the U.S.

Parker, which specializes in making motion and control technologies, said it now expects the deal to close in the third quarter this year.

 
 
Meggitt Shares Tick Higher After Britain Says Parker Takeover Deal Worries Allayed
 

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