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.