A £6.3billion foreign takeover of one of Britain’s biggest defense companies has come closer after winning backing from Brussels.
The sale of Coventry-based Meggitt has been cleared by the European Commission, which said the company’s US buyer, Parker-Hannifin, had met its competition requirements.
Kwasi Kwarteng, the UK business secretary, has yet to give his blessing to the deal following national security concerns. Meggitt manufactures brakes used on more than 70,000 civil and military aircraft and supplies parts for the RAF Typhoon jet fighter.
Parker will sell its Ohio-based aircraft wheels and brakes division as part of the deal.
In a statement, the commission said: “Parker’s proposed remedy package will preserve competition in these markets and ensure that aerospace and defense customers have access to sufficient choice of component suppliers and will continue to benefit from competitive prices.
Mr Kwarteng has ordered an investigation into the takeover by the Competition and Markets Authority (CMA), which delivered its report to him last month.
While there is no deadline for the Business Secretary to decide whether he is satisfied, requires further recourse, or wants a full investigation, Parker still aims to close the deal by the end of summer this year.
The CMA also submitted a report to Mr Kwaerteng regarding the risks involved in the proposed £2.6bn takeover of Ultra Electronics, which manufactures parts for the Royal Navy’s nuclear submarine fleet.
Its potential buyer, US private equity firm Advent International, is also awaiting its opinion on the deal.
Both proposed deals are under intense scrutiny after the sale of air-to-air refueling company Cobham to US private equity firm Advent two years ago.
Cobham was bought by Advent for £4billion despite fears it posed a national security risk due to its sensitive UK military contracts.
Advent has made promises to allay concerns, including pledging to protect its footprint in the UK and inform ministers of potential sales of parts of Cobham.
Parker became the winning bidder for Meggitt after fighting off interest from TransDigm.
The agreement must also be approved by France, Brazil and China.
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