Business Secretary Kwasi Kwarteng updates on the proposed acquisition of Meggitt plc by Parker-Hannifin Corporation

The Business Secretary today (Tuesday, July 19) approved the acquisition of Meggitt by Parker-Hannifin after consulting with the Ministry of Defense and the Competition and Markets Authority and examining the outcomes of two independent consultations.

The announcement comes after the Business Secretary sought advice on how to address concerns about competition and national security raised by Parker-proposed Hannifin’s acquisition of Meggitt, a UK aerospace company.

Parker-Hannifin is a publicly traded US company that provides components to the global mobile, industrial, and aerospace markets.

The government held a consultation period through July 13, 2022, regarding the commitments made by the businesses to address the issues raised.

The parties have now agreed to take steps to reduce the dangers to national security and concerns about competition, according to the Business Secretary.

The decision notice has more information. The commitments to reduce the national security risks went into effect today. The undertakings are, in brief:

Security of Supply: making sure Parker will agree to uphold current contracts as long as they are in effect and will tell the MOD in advance if there is a significant change in Meggitt’s capacity to supply the MOD.

Information Security: Upholding the dedication to the current List X / Facility Security Clearance site security measures protecting sensitive HM government information in Meggitt, including the necessity to keep the majority of the Meggitt Board of Directors as UK citizens who reside in the UK.

UK sovereignty capabilities: forcing Parker-Hannifin to implement a control plan that has been approved by the HM government in order to stop the International Traffic in Arms Regulations (ITAR) from being applied to goods that Meggitt designed and produced that are not subject to the ITAR.

The projects would enable the MOD to incorporate new technology to future-proof the cure.

Details can be found on the judgement notice. The undertakings to reduce the competition issues also went into effect today.

In conclusion, the undertakings will transfer ownership of Parker’s aircraft wheels and brakes (or “AWB”) division (also known as the “Divestment Business”) to a buyer who has been given the Secretary of State’s approval.

The Divestment Industry consists of:

All movable property (including the AWB division’s production facility in Avon, Ohio, USA, together with the necessary supplies and equipment) and intangible property (including intellectual property rights)

All contracts, leases, commitments, and customer orders of the

Divestment Business all customer credit and other records of the

Divestment Business all staff members currently employed by the

Divestment Business, including staff members seconded to the

Divestment Business, shared personnel, as well as certain additional staff members

In addition to the concerns about national security and competition, Parker-Hannifin has given the Secretary of State economic undertakings. Its commitments include the following:

Parker-Hannifin will keep Ansty Park as its UK headquarters and its centre of expertise for aerospace and advanced materials, continuing to use the Meggitt name alongside its own.

It will boost R&D work, including pursuing initiatives for technology and research on net zero and sustainable aviation.
Jobs will be safeguarded.

These voluntary commitments from Parker-Hannifin guarantee Meggitt’s future and the significant position it holds in the UK aerospace industry.