Parker Hannifin, a U.S. industrial company, has agreed to a £6.3 billion ($8.8 billion) deal to buy British defense and aerospace company, Meggitt.
News of the deal sent Meggitt stock soaring more than 55% in Europe after both companies announced that Parker will pay 800 pence per share. Parker’s shares were up 1.5% Monday.
As part of the deal, Parker will maintain Meggitt’s U.K. headquarters, keep a majority of U.K. nationals on the company’s board, as well as keep the existing R&D, engineering, and manufacturing headcount in Britain.
The deal, according to Parker, enhances the Cleveland-based company’s future prospects within the aerospace and defense sectors. For one thing, the acquisition almost doubles the size of Parker’s Aerospace Systems division.
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Parker’s Chairman and CEO Tom Williams said: “We strongly believe Parker is the right home for Meggitt. Together, we can better serve our customers through innovation, accelerated R&D and a complementary portfolio of aerospace and defense technologies.”
Nigel Rudd, Meggitt’s Chairman, believes the U.S. giant’s offer “provides the opportunity to significantly accelerate and de-risk” Meggitt’s standalone strategy, “while continuing to deliver for shareholders,” Rudd said.
The offer Parker is bringing to the table will also ensure that Meggitt continues to have a significant presence in the UK.
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