LONDON: Melrose Industries has narrowly clinched an £8 billion ($11 billion) takeover of British engineer GKN, winning an acrimonious three-month battle for control of the FTSE-100 company.
The UK-based turnaround specialist said on Thursday that 52.4 per cent of GKN’s shareholders had accepted its hostile cash-and-shares offer by the time the deadline for a deal expired at 1200 GMT.
That just surpassed the acceptance threshold of 50 per cent plus one share that Melrose had set for the takeover of the aerospace and automotive parts supplier.
It means Melrose has triumphed with Britain’s biggest hostile bid since Kraft pounced on confectionery giant Cadbury in 2009.
GKN supplies parts to carmakers such as Volkswagen, components to aircraft including the Eurofighter Typhoon and produced Spitfires during the Second World War.
Given its status as a mainstay of British engineering, Melrose’s bid has attracted close scrutiny from politicians.
The turnaround specialist’s motto is “buy, improve, sell” which provoked fears among some lawmakers about the security of GKN’s 6,000 British employees and the future of the engineer’s pension schemes.
It also raised concerns Melrose could in the future sell GKN’s aerospace business, which is involved in defence programmes, on to an overseas buyer in a move that might have implications for national security.
Seeking to address such concerns, Melrose made a series of legally binding commitments about GKN’s future this week. They included pledges on research and development expenditure and a promise the combined firm would remain headquartered in Britain.
“During the bid, Melrose made commitments which they are bound to honour,” business minister Greg Clark said.
— Reuters
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