In connection with Parker-proposed Hannifin’s acquisition of Meggitt plc, a UK aerospace business, two separate consultations have been opened as of today (June 28, 2022).
The consultations are intended to address the competition and national security issues that the proposed merger has raised.
The US-based corporation Parker-Hannifin provides parts to the global aerospace, industrial, and mobile markets, including the UK. The New York Stock Exchange lists it.
The Business Secretary intends to accept Parker-commitments Hannifin’s to remedy the issues.
The Ministry of Defense and the Competition and Markets Authority’s recommendations were incorporated into this decision.
According to the procedure outlined in the Enterprise Act of 2002, the proposed undertakings are now available for public comment until 11:45 p.m. on July 13, 2022.
The Business Secretary will not make a decision until the consultation is over and all comments have been carefully examined.
On GOV.UK, you can read the proposed national security undertakings in their entirety. In conclusion, they would provide:
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.
Sovereign UK Capabilities: Parker-Hannifin must implement a control plan that has been approved by the HM government to stop the International Traffic in Arms Regulations (ITAR) from being applied to items that Meggitt designed and produced that are not subject to the ITAR.
The projects would give the MOD the opportunity to upgrade the remedy with modern technology.
On GOV.UK, you can read the proposed competition undertakings in their entirety. In short, they would deliver the aviation wheels and brakes (or “AWB”) section of Parker (the “Divestment Business”) to a buyer who had been authorized by the Secretary of State.
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 authorizations, licenses, and permissions granted by any governmental body in support of the Divestment Business.
all agreements pertaining to the Divestment Business’s leases, commitments, and client orders
every consumer credit record and other Divestment Business records
All employees currently working for the Divestment Business, including those who have been seconded to it, as well as any shared or additional employees.
These choices regarding the issues of national security and competition stand apart from any arguments regarding the broader economic ramifications of the proposed merger.
The Secretary of State must act and be seen to operate in a scrupulously fair and unbiased manner since the Business Secretary makes decisions in a quasi-judicial role.