Tuesday, 6 March 2018

UK engineering giant GKN takeover bid by Melrose should be blocked, MPs say

The proposed takeover of UK engineering giant GKN should be blocked, a group of 16 MPs has said in a letter to Business Secretary Greg Clark.

The letter, led by Labour MP Jack Dromey and Conservative MP Rachel Maclean, is the latest sign of worry over the deal.

Melrose Industries has offered £7.4bn for the 259 year-old firm.

The Pensions Regulator has warned that the move could affect the company's ability to fund its pension scheme.

GKN is defending itself against the approach from Melrose, a firm that specialises in buying up industrial companies it believes are undervalued and restructuring them before selling them on.
That has raised fears that GKN, one of the UK's largest industrial firms, will be broken up and sold to overseas owners.

There are also worries over the level of additional debt GKN would take on if the takeover goes ahead.

The letter from the cross-party group of MPs says: "GKN is one of the most prominent engineering firms in the UK, the third biggest in our country. It is a world class success story, the pride of British industry which supplies components to companies such as Jaguar Land Rover.

"We are writing to you because we all have a GKN plant and/or supply chain-affected firm in our constituencies. Due to this, we have shared our concerns about the proposed hostile takeover bid by Melrose and want to express to you why we believe the takeover should not succeed."

BBC        News.