Meggitt provides ammunition handling systems for military aircraft, including the Apache attack helicopter. (Crown Copyright)
UK Secretary of State for Business, Energy, and Industrial Strategy (BEIS) Kwasi Kwarteng is “minded to accept” the commitments that Parker Hannifin Corporation is offering to ease concerns about its proposed acquisition of Meggitt, the UK government announced on 28 June.
Kwarteng will not make a final decision on Parker's legally binding commitments, or “undertakings”, until a public comment period ends on 13 July, the government said.
Parker, which welcomed the announcement, is headquartered in the United States, and Meggitt is based in the United Kingdom. To address UK national security concerns about the deal, Parker has committed to honouring Meggitt's existing contracts with the UK Ministry of Defence (MoD) and will notify the MoD if Meggitt's ability to supply the ministry changes. Parker has also agreed that UK nationals residing in the UK would continue to make up a majority of Meggitt's board of directors.
To protect “sovereign UK capabilities”, Parker would institute a UK government-approved control plan to ensure that Meggitt products that are free from US International Traffic in Arms Regulations (ITAR) are not affected by ITAR restrictions.
To ensure its acquisition does not reduce competition, Parker has agreed to sell its Aircraft Wheel & Brake division to US-based Kaman Corporation. Parker and Meggitt both make wheels and brakes for military helicopters, drones, and other aircraft.
The UK government has been scrutinising the Meggitt acquisition since Parker unveiled it in August 2021. Parker has proposed paying GBP6.3 billion (USD7.7 billion) for its fellow motion and control system provider.