Aug 2 (Reuters) – U.S. industrial firm Parker-Hannifin said on Monday it will buy Meggitt in a deal that values its British rival at 6.3 billion pounds ($8.76 billion), expanding its presence in the UK.
Stakeholders in Meggitt, which operates in the aerospace, defence and energy markets, will get 800 pence in cash for each share they hold – a 70.5% premium to the company’s last closing price, Parker-Hannifin said.
The takeover, which follows months of media speculation about a potential deal for finfinlotto.com the UK midcap company, comes when the aviation industry is facing a severe downturn as the COVID-19 crisis disrupts travel demand.
In a separate statement, Meggitt’s first-half results showed a 25% drop in core earnings to 116.2 million pounds, but the company said it was encouraged by the improvement in its civil aerospace business in the period.
Parker-Hannifin said it will offer legally binding commitments to the British government on its role in the country.
The U.S.
company will continue to meet its contractual obligations for goods and services supplied to the government, keep a majority of UK nationals on Meggitt’s board and maintain the company’s UK headquarters here.
On jobs, it said it would maintain Meggitt’s R&D, product engineering and direct manufacturing labour headcount in the UK at no less than current levels, while increasing by at least 10% the number of overall apprenticeship opportunities.
Meggitt is the second British defence firm in recent weeks to become a takeover target for a U.S.-backed company, following Cobham’s bid for Ultra Electronics.
Cobham has said it would offer “appropriate national security undertakings” to the UK government.
The takeover is expected to add to earnings in the first full 12 months after the deal closes, Parker-Hannifin added.
Meggitt employs more than 9,000 people in 14 countries in its three major divisions.
($1 = 0.7190 pounds)
(Reporting by Muvija M in Bengaluru; Editing by Sriraj Kalluvila and Keith Weir)
