British defence firm Meggitt has moved a step closer to falling into foreign hands after shareholders gave the green light to a £6.3 billion takeover by US group Parker Hannifin.
The majority of investors voted in favour of the deal at a general meeting held by the group, with the backing of 99.8% of votes cast and 86.8% of investors.
But the deal remains under Government scrutiny over national security concerns.
Business Secretary Kwasi Kwarteng is reported to be looking closely at whether the deal – as well as the separate bid for fellow UK defence contractor Ultra Electronics – would harm the UK’s national security.
Coventry-headquartered Meggitt makes parts for several aircraft, including military planes such as the Eurofighter Typhoon and F-35.
It has annual revenues of around £1.7 billion and employs more than 9,000 staff.
Investor approval for Parker Hannifin’s 800p-a-share offer comes after rival US suitor TransDigm pulled out of the takeover tussle earlier this month.
TransDigm, which is listed on the New York Stock Exchange, said it would not make a firm offer for FTSE 250 firm Meggitt, after floating a potential £7 billion bid last month.
Aerospace company Parker Hannifin has already looked to make assurances to ease UK concerns over the deal, pledging to continue supplying the Government, keep manufacturing and technology in the UK and ensure a majority of Meggitt’s board are British.
Following the shareholder vote, Parker’s chairman and chief executive Tom Williams said: “The legally-binding commitments we offered alongside our recommended offer underline our intention to be a responsible steward of Meggitt, and we are engaged with the UK Government to finalise the commitments.”
But the Government has vowed to step up scrutiny of defence takeovers following the raft of recent deals in the sector.
It comes amid a flurry of overseas deals for UK-listed companies, with retail giant Morrisons at the centre of a bidding war with US private equity.