Coventry engineering company to sell to Americans, but UK government “closely monitoring” situation

Meggitt

Meggitt PLC, the Coventry engineering company specialising in high performance components and subsystems for the aerospace, defence, and energy markets, has agreed to its acquisition by the American-based Parker-Hannifin Corporation in a deal that values the British company at around £6.3 billion.

Meggitt and Parker share a heritage as established manufacturers with significant presence across the UK, serving as trusted defence suppliers to the UK and US governments, and governments across the EU and globally. The UK is an important market to Parker and a key part of its business. Parker is a highly experienced acquirer with prior experience of successfully integrating UK companies in the industrial sector into its business.

Meggitt works on military programmes for the BAE Systems Typhoon and Lockheed Martin F-35 fighters and makes sensors, landing gear components and other kit for Boeing and Airbus.

However, the UK government is “closely monitoring” the planned takeover, according to reports and the news comes just days after the government also said it was monitoring the takeover of another successful British defence firm, Ultra Electronics, which has a intelligence and communications site at Gloucester Business Park.

From its headquarters in Coventry, Meggitt employs more than 9,000 people across 14 countries. The company was established in 1850 when two Italian craftsmen emigrated to the UK and established Negretti & Zambra. They went on to create some of the world’s earliest aviation instruments for hot air balloons, including the first altimeter. Since then it has continued to pioneer solutions for aviation and industrial applications.

Tom Williams, Chairman and Chief Executive Officer of Parker said: “The combination of Parker and Meggitt is an exciting opportunity for both companies’ team members, customers, shareholders and communities. We strongly believe Parker is the right home for Meggitt.Together, we can better serve our customers through innovation, accelerated R&D and a complementary portfolio of aerospace and defense technologies.

“We are committed to being a responsible steward of Meggitt and are pleased our acquisition has the full support of Meggitt’s Board. We fully understand these responsibilities and are making a number of strong commitments that reflect them. During our longstanding presence in the UK we have built great respect for Meggitt, its heritage, and its place in British industry. Our own journey over more than 100 years has taught us the importance of a strong culture and reputation.”

Sir Nigel Rudd, Chairman of Meggitt, said: “Meggitt is one of the world’s foremost aerospace, defence and energy businesses, leading the market with a strong portfolio of technology and manufacturing capabilities, and holding a significant amount of intellectual property. Whilst Meggitt is currently pursuing a strong, standalone strategy which will deliver value to shareholders over the long-term, Parker’s offer provides the opportunity to significantly accelerate and de-risk those plans, while continuing to deliver for shareholders. Parker’s offer also includes far-reaching commitments that will ensure that Meggitt remains a significant presence in the UK, increasing investment in research and development, and increasing the number of apprenticeship opportunities. The Board of Meggitt is confident that Parker will be a responsible steward of Meggitt and unanimously recommends Parker’s offer.”

Tony Wood, Chief Executive of Meggitt, said: “Bringing together the Meggitt and Parker businesses will provide increased benefit to the UK with the provision of technologies, products and capabilities through Meggitt, and a leading aerospace business in Parker. The offer from Parker is an endorsement of the work undertaken to transform the Meggitt Group in recent years, and the Combined Group will maximise the opportunities for future growth and profitability with a shared commitment to operational excellence, allowing us to continue to invest in our people, products and services for customers worldwide for years to come.”