Government clears path for £6bn sale of RAF Typhoon supplier to US

·2 min read
RAF Typhoon jet fighter meggitt parker hannifin
RAF Typhoon jet fighter meggitt parker hannifin

The £6.3bn US takeover of British defence company Meggitt is poised to go through after the Government said it was likely to accept national security concessions.

The Department for Business, Energy and Industrial Strategy (BEIS) said Business Secretary Kwasi Kwarteng was “minded to accept” proposals offered by Parker-Hannifin to satisfy Government concerns about the deal.

Meggitt produces brakes used on over 70,000 civil and military aircraft, and provides parts to the RAF Typhoon jet fighter. Amid a series of proposals, Parker said it will honour existing contracts while they are in place and will notify the Ministry of Defence in advance if Meggitt is unable to deliver supplies.

It reiterated its commitment to protect sensitive Government information held by Meggitt and will ensure UK nationals resident in Britain make up a majority of the company's board.

The Ohio-based firm will also establish a control plan, to be approved by Westminster, to prevent International Traffic in Arms Regulations (ITAR) controls applying to Meggitt.

ITAR are US rules that control the export of defence items and services.

Around 2pc of Meggitt’s turnover comes from Ministry of Defence contracts and the company employs over 2,000 people in the UK.

The Department for Business, Energy and Industrial Strategy (BEIS) has now launched two consultations on Parker-Hannifin’s proposals. Mr Kwarteng will take a final decision on the deal after the consultations close on July 13.

Parker-Hannifin, a US supplier to the mobile, industrial and aerospace industries, first announced a deal to acquire Coventry-based Meggitt in August 2021. Mr Kwarteng called in the deal for investigation on national security grounds in October 2021.

The Meggitt sale is one of a number of US takeovers in the British defence industry, many of which have drawn national security concerns.

Mr Kwarteng announced last week that he would approve the £2.6bn acquisition of Ultra Electronics, which makes secret parts for nuclear submarines, following pledges made by its bidder, Advent International.

The US previously threatened to limit co-operation on defence if Britain blocked the deal.

The Telegraph revealed earlier this week that Advent plans to break up Ultra as soon as the deal completes, selling off its non-defence operations.

Ultra is the second major UK defence company purchased by Advent after it snapped up Cobham, maker of air-to-air refuelling systems.

The Boston-based group came under fire after offloading parts of Cobham despite making a "good custodian" promise in 2019.

The Meggitt sale is the final takeover deal to be examined under the Enterprise Act 2002. Tougher rules were introduced at the start of the year which give ministers power to intervene in deals on national security grounds.

Parker-Hannifin’s Meggitt takeover was cleared by the European Commission on competition grounds earlier this year.

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