MPs probe hostile bid for defence giant GKN

THE hostile takeover of the defence giant GKN is to be investigated by MPs amid concern that it could harm national security.

In a rare intervention in a corporate takeover, executives from GKN and the predatory bidder Melrose are being called before the business committee.

MPs want answers about the risk to jobs, pensions and the manufacturing of key military parts if the £7.4billion deal goes ahead.

It came as Defence Secretary Gavin Williamson expressed ‘serious concerns’ about the proposed takeover.

Giving evidence to the defence select committee, Mr Williamson said he had written to Business Sec- retary Greg Clark about the deal, adding: ‘There is no clarity as to what the true approach is going to be in terms of the GKN military side of the business.

‘We sometimes have to ask tough questions as to whether we should raise concerns about the break-up of large successful important businesses that have a real impact upon our national security. It would have been remiss if I didn’t do that on this occasion.’

Turnaround specialist Melrose’s bid for GKN, which employs 6,000 people in the UK and 58,000 worldwide, is facing close scrutiny amid concerns over its potential impact.

Redditch-based GKN, which is nearly 260 years old, makes parts for fighter jets including the US-UK F-35, the Eurofighter Typhoon, and the US B-21 stealth bomber. It also produces components for aircraft and car firms including Airbus, Mercedes and Toyota.

The Government is investigating whether it could intervene on national security grounds. The business committee is to hold a hearing into the takeover on March 6.

Committee chairman Rachel Reeves said: ‘GKN is an important company for the UK and globally. This session will be an opportunity to hear from Unite [the union] and for GKN and Melrose to set out their case for the future of the business.’

GKN’s fate was thrown into doubt last month when Melrose tabled its offer to buy the firm, which was rejected by board members as cheap and opportunistic.

Melrose bosses Simon Peckham, 55, Christopher Miller, 66, and David Roper, 68, are now battling GKN’s new American boss Anne Stevens, 69, in the biggest UK takeover bid in nearly a decade.

Melrose’s strategy is to sell firms on at a profit within three to five years, raising fears that GKN will be broken up and sold off around the world.

It emerged earlier this week that Melrose suffered a £28million loss last year and has presided over factory closures and hundreds of job cuts.

The firm said yesterday: ‘We welcome the opportunity to appear before the select committee.

‘We believe that while there are no competition or national security issues, it is in fact in the national interest for Melrose to be the guardian of GKN’s businesses. As a British public company, we are fully aware of our ownership responsibilities.’

GKN said it was happy to give evidence to the committee.