UK Defence Giant Battles Hostile Takeover Bid

Picture: MoD

A hostile takeover battle for one of Britain’s oldest defence suppliers could be stopped over national security concerns.

GKN is fending off a £7bn offer from Melrose Industries - a City of London-based investment firm which specialises in improving industrial companies, before selling them on for a profit.

The defence company can trace its origins back to 1759 and is heavily involved in a number of sensitive projects, including the manufacture of parts for the UK's F-35 Lighting stealth fighter, Eurofighter Typhoon jets, the Airbus A400M military transport aircraft and the new US B-21 Raider bomber.

The Defence Secretary, Gavin Williamson, has written to his business counterpart, Greg Clark, who has the power to call a public interest inquiry into the deal, expressing his concern over Melrose’s bid.

Labour leader Jeremy Corbyn has labelled Melrose an “asset stripper” and said if the party wins the next election it would stop takeovers that threaten to “destroy our industrial base”.

Melrose denied this claim, saying it makes a large contribution to the UK economy.

The government can intervene in deals which raises concerns surrounding national security.

GKN has rejected the bid, urging shareholders to put their faith in its plan to separate the automotive and aerospace branches into two different businesses.

A government spokesperson has said it is "closely monitoring" the situation.

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