Meggitt agrees £6.3bn takeover by US firm Parker-Hannifin

Defence and aerospace technology firm Meggitt has agreed a £6.3 billion takeover by American firm Parker-Hannifin.

The FTSE 250 company confirmed an offer from the US engineering technology giant valuing Meggitt at 800p per share.

Shares soared by 60% in early trading on Monday following the announcement.

It said the move represents a 70% premium on the share value of the company at the end of trading on Friday July 30, when it was at 469.1p per share.

Parker, which already has operations in the UK employing around 2,000 people, has committed to maintain its UK headquarters in Coventry.

It also agreed to continue to meet Meggitt’s government contractual obligations with the department of defence.

The buyer also said it will at least maintain Meggitt’s investment in UK research and development, with plans to increase this by 20% over the next five years, subject to normal activity in the sector.

It comes after a period of turbulence during the pandemic, with Meggitt cutting 1,800 jobs last year across its global business after Covid-19 hit the travel sector.

On Monday, the company also revealed that its swung to a profit for the first half of 2021 as it continued its post-pandemic recovery.

Parker-Hannifin chairman and chief executive Tom Williams said: “We are committed to being a responsible steward of Meggitt and are pleased our acquisition has the full support of Meggitt’s board.

“We fully understand these responsibilities and are making a number of strong commitments that reflect them.

“During our longstanding presence in the UK we have built great respect for Meggitt, its heritage, and its place in British industry.”

Meggitt chairman Sir Nigel Rudd said: “Meggitt is one of the world’s foremost aerospace, defence and energy businesses, leading the market with a strong portfolio of technology and manufacturing capabilities, and holding a significant amount of intellectual property.

“Whilst Meggitt is currently pursuing a strong, standalone strategy which will deliver value to shareholders over the long term, Parker’s offer provides the opportunity to significantly accelerate and de-risk those plans, while continuing to deliver for shareholders.”