UK Secretary of State at the Department of Business, Energy and Industrial Strategy (BEIS) Kwasi Kwarteng has directed the Competition and Markets Authority (CMA) to assess whether Parker Hannifin Corporation's proposed acquisition of Meggitt raises national security concerns, the department announced on 18 October.
The CMA will have until 18 March 2022 to finish its work and report its findings to Kwarteng, the BEIS said. While Kwarteng did not say what national security concerns might exist, Parker is headquartered in the United States and Meggitt is based in the United Kingdom.
Parker said in a statement that it looks forward to “engaging” with the UK government and “bringing the review of the transaction to a satisfactory conclusion”. It continues to expect to close the deal in the third quarter of 2022.
Parker has proposed paying GBP6.3 billion (USD8.7 billion) for Meggitt, saying the two aerospace suppliers could better serve their customers by combining their complementary portfolios. Both companies make motion and control systems.
Parker unveiled its bid in early August and received the approval of Meggitt shareholders in late September. It has offered to make several legally binding commitments to the UK government to preserve Meggitt's UK heritage and relationships with important stakeholders.
Kwarteng's directive to the CMA came about two months after he told the agency to conduct a similar review of Cobham Group's proposed acquisition of Ultra Electronics for GBP2.6 billion. That review is due to be completed by 18 January 2022. While Cobham and Ultra are both based in the UK, Cobham is owned by US private equity firm Advent International.
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