The government will assess whether the acquisition of the British engineering giant GKN raises public interest concerns, the business secretary, has said.
The shareholders have accepted a hostile bid of € 8.1 billion from investment firm Melrose Industries.
The unions want the agreement to be blocked for reasons of national security.
Corporate secretary Greg Clark told the BBC Radio 4 Today programme he would not see until he had considered all of the evidence.
The battle for the GKN, which employs 58,000 people around the world – 6,000 of them in the UK, drew protests from the government, trade unions and GKN customers.
Because the GKN offer battle issues
Work called Melrose a “short-termist asset-stripper” and condemned the affair of Britain’s oldest engineering companies, has had a hand in making everything, from the Mini to the Spitfire.
Melrose Industries, which specialised in turning round troubled businesses of production and sales, has won the support of 52% of GKN shareholders.
The British company has promised to keep the company based in the UNITED kingdom, the maintenance of current levels of expenditure in R&d, and not to sell the aerospace industry for five years.
Mr. Clark said that it was “good” Melrose had made “legally binding” commitments, but now the government has had a statutory responsibility to assess whether the merger gives rise to public interest concerns.
Lord Heseltine, the former defence secretary, said that it should be stopped for reasons of national security, adding that “no other country of our sort would have allowed this to happen.”
There are concerns that Melrose could sell GKN aerospace business, which is involved in the programs defense, to a foreign buyer in the future.
However, Mr Clark has refused to be drawn on whether he believed that there were national security concerns about the offer, because he needs to act “objectively”.
He also rejected Lord Heseltine says that in other countries would block such a takeover, saying: “our practice is very consistent with those of other competitors”.
He added that the shareholders had made their choice and decided “they want a new management”.
He also played down concerns of speculators, who buy shares to swing the vote, saying investors who had recently sold had actually chosen not to perform the management of the company.Analysis
The BBC Business reporter Rob Young
The business secretary has defended the rules governing acquisitions, and is clearly satisfied with the guarantees, he managed to get out of Melrose.
Listening to Greg Clark’s radio interview, it was clear that he thinks that the shareholders should determine the fate of the society of which they are owners.
He said that it is “narrow issue of” national security, that he will take into consideration.
It would be Melrose (five years?) the property of GKN threaten the UK’s national security? Unions think so.
However, the vast majority of the GKN of work for civilian purposes, not military.
GKN is not listed as one of the Ministry of Defence’s top 50 suppliers. But manufactures components for the Eurofighter Typhoon fighter jet is made by BAE and Airbus) and the A400M military aircraft (made by Airbus).
GKN to US for the defence is much more significant.
A committee is still deciding whether to give the approval to Melrose to act as a lender of the us military. Melrose clearly expects will be the approval.
The UNITED states might say “yes” and the UK “no”?
Some analysts doubt a national security argument can be made to block this acquisition.
Admitting defeat, THE administration has said that it would now work with Melrose to ensure the success of the new company.
GKN council had promised that it would review the same and to sell its auto parts division, but it was not enough to stop the investors to agree to sell their shares in Melrose.
Christopher Miller, chairman of Melrose, said: “We are delighted and grateful to have received the support of GKN shareholders for our plan to create a UNITED kingdom industrial power, with a market capitalisation of over £10, and a huge future.”
News of the success of the proposal sent to GKN share price by over 6 per cent to 450p. Melrose’s offer is equivalent to 462p a share.
GKN’s businesses cover aerospace and automotive. Its Broadcast systems division, about half of the world passenger cars and light trucks.
Its aeronautics division is one of the main suppliers of the us military and a key partner for the defense program like the F-35 joint strike plane in which the UK government has a stake.
Unite the union, assistant general secretary, Steve Turner, said Mr. Clark should use legal powers to intervene in the deal.
Before Melrose has won the tender, Airbus, which is provided by GKN, said it would be “practically impossible” to give a new business to GKN if Melrose’s offer was accepted because it is damaged long-term investment prospects of the company, which may reduce R&D budgets and limit innovation.Bid launched
Melrose has launched its offering in January, initially to £7 billion. Rose this month to € 8.1 bn, with a maximum of £1 billion to support the pension fund.
It argued that it could increase GKN’s profitability has been in steady decline over the last five years.
In the period of the offer, GKN had suffered a leadership crisis, with its ceo-in-waiting, Kevin Cummings, forced to resign after the problems the company’s aerospace division.
The new chief executive, Anne Stevens, a former Ford executive, developed a plan for the merger of GKN Driveline with US car components group of Dana to create a new company. GKN would have had a 47% interest and $1.8 billion (£1.28 billion) in cash from Dana.
But Melrose called “plans of panic and full of contradictions”.