The UK Government has said that it is keeping a close watch on the proposed acquisition of British aerospace and defence group Meggitt by US rival Parker-Hannifin.
Meggitt, headquartered in Coventry in the UK, employs more than 9,000 people worldwide. The company has technology and products on almost every major aircraft platform, including the F-35s.
The companies announced on Monday that they had agreed on an £8-a-share cash acquisition, valuing the deal at approximately £6.3 billion (AU$11.9 billion).
As reported by the BBC, the UK Department of Business released a statement shortly afterwards, asserting that it has powers to intervene in mergers and takeovers on national security grounds.
“Under the Enterprise Act 2002, the Business Secretary has powers to intervene in mergers and takeovers which raise national security concerns,” the statement said.
“While commercial transactions remain primarily a matter for the parties involved, the government is closely monitoring the proposed acquisition of Meggitt by Parker-Hannifin.”
No decision has been taken to intervene at this stage.
This is the second recent example of an American buy-out of a UK defence contractor attracting British government scrutiny.
Only six days ago, the government indicated that it may intervene in the proposed £2.6 billion (AU$4.9 billion) takeover of UK defence group Ultra Electronics by US firm Cobham.
“We are committed to being a responsible steward of Meggitt and are pleased our acquisition has the full support of Meggitt’s Board,” Tom Williams, Parker-Hannifin Chairman and CEO, said on the recent acquisition. “Together, we can better serve our customers through innovation, accelerated R&D and a complementary portfolio of aerospace and defence technologies.”