Meggitt shareholders approve acquisition by Parker-Hannifin

Shareholders of UK aerospace systems supplier Meggitt have given their approval to the cash acquisition of the company by US-based competitor Parker-Hannifin in a £6.3bn (US$8.77bn) deal.

According to a September 21 announcement by Parker-Hannifin 86.82% of scheme shareholders voted in favour of the acquisition at the court meeting, with 99.79% voting in favour of the deal at the general meeting. The deal will now move forward and is expected to close in Q3 2022.

Meggitt Ansty Park — Meggitt has invested in the development of new facilities at Ansty Park, part of a wider restructure of its worldwide holdings. Parker has said it will maintain key UK sites should shareholders agree with the planned acquisition. Meggitt

Meggitt had revenues of approximately US$2.3bn in 2020 and has more than 9,000 employees around the world, including around 2,000 in the UK. Parker meanwhile reported sales of US$13.70bn and net income of US$1.21bn for its most recently completed fiscal year.

In a statement Tom Williams, CEO of Parker-Hannifin, said that the combination of the two companies would create “a world class provider of engineering aerospace solutions” for the civil and defence markets.

“The legally-binding commitments we offered alongside our recommended offer underline our intention to be a responsible steward of Meggitt, and we are engaged with the UK government to finalise the commitments,” Williams said.

As part of the potential deal, Parker offered a number of binding commitments, including ensuring that contractual obligations in respect of goods and services supplied to or for the benefit of the UK government would continue and maintain UK-based technology and manufacturing capabilities, among others.

In addition, research and design would increase by 20% over a five-year period, while apprentice numbers would also see a 10% boost. Of the proposed legally binding commitments, all except the research and design would be valid for a 12-month period.

The acquisition of UK-based defence suppliers by US companies was put in the spotlight in 2020 with private equity firm Advent’s takeover of Cobham in a £4bn deal. In February 2021, US-based power management company Eaton agreed a deal to acquire Cobham’s Missions Systems business segment for US$2.83bn, which is expected to close in the second half of the year.