- Britain ordered the review of the planned 6.3 billion-pound $4.7 billion takeover of aerospace and defense firm Parker-Hannifin Corp. by United States - based Meggitt Plc citing national security concerns.
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Kwasi Kwarteng, U.K. business secretary, has instructed the Competition and Markets Authority to prepare a report on the proposed transaction by March 18 in a statement issued Monday.
It s the latest intervention from Prime Minister Boris Johnson'government, which has said it would increase scrutiny of defense takeovers after a flurry of M&A in the sector. In August, Kwarteng ordered a probe into the proposed acquisition of Ultra Electronics Holdings Plc by a private equity firm.
The government also examined M&A in other sectors, issuing a Public Interest Intervention notice on future deals including Nvidia Corp.'s potential acquisition of Arm Ltd. which is still being assessed or examined.
Parker-Hannifin shareholders backed the Meggitt deal last month. Parker said then it would engage with the government on legally binding commitments, after promising to keep a majority of the company's board in Coventry, England, and to maintain technology and manufacturing in the U.K.
As of 8:00 a.m. Tuesday in London, Meggitt shares were negative 0.3%. Parker-Hannifin fell 0.7% on Monday in New York.
The Cleveland-based firm said that it looks forward to engaging with the government and bringing the review of the transaction to a satisfactory conclusion. Both companies said they continue to expect the deal will close in the third quarter of 2022.
Meggitt looks forward to working constructively with the CMA on its review, it said Tuesday.
Meggitt is one of the last independent British aerospace suppliers, with customers including Boeing Co. Airbus SE and BAE Systems Plc.
A new National Security and Investment Act, which will broaden government powers to intervene on security grounds, is due to come into force in January next year.
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