U.K. poised to clear way for Parker's mega Meggitt acquisition

CLEVELAND—Parker-Hannifin Corp. of Mayfield Heights, Ohio, is closing in on a key approval in its planned $7.7 billion acquisition of United Kingdom aerospace and defense supplier Meggitt P.L.C.

The U.K. Secretary of State for Business, Energy and Industrial Strategy announced June 28 that the government was "minded" to accept measures to address competition and national security concerns. The decision from Business Secretary Kwasi Kwarteng follows advice from the Ministry of Defense and the Competition and Markets Authority, according to a U.K. government statement.

Parker noted in a news release that the decision "is now subject to a public consultation period" that ends on July 13. A final decision will be made then.

Tom Williams, president and CEO of Parker, said in a statement, "We are pleased that following very constructive engagement with the U.K. government, the Secretary of State is minded to accept the national security and competition undertakings we have offered. The combination of Parker and Meggitt is an exciting opportunity for both companies and we look forward to welcoming Meggitt to the Parker team."

Parker "continues to expect the acquisition to close" in the third quarter, according to its release. (A Parker microsite describing the deal, which was announced in August 2021, is here.) Meggitt, headquartered in Coventry, U.K., has annual revenue of about $2.3 billion and more than 9,000 employees.

Bloomberg noted that the Meggitt decision comes after Britain said last week it would accept a $3.1 billion takeover of defense-technology specialist Ultra Electronics Holdings P.L.C. by U.S. private-equity firm Advent International Corp. through its Cobham arm, acquired in 2020.

In May, Parker reached an agreement to sell its Avon-based Aircraft Wheel and Brake Division in a move required to close resolves concerns about overlapping activities with Meggitt and to close the acquisition. The buyer, Kaman Corp. of Bloomfield, Conn., a manufacturer of components and materials for aerospace and defense, industrial and medical markets. is paying $440 million for the division.

The European Commission in April cleared the Meggitt deal, with one of the deal conditions being the divestment of the Aircraft Wheel and Brake Division. The U.K. government also said Parker has pledged to honor existing contracts to its defense ministry and agreed to protect sensitive government information. Meggitt supplies parts for both Boeing and Airbus, and its brakes are used by military units.