The Meggitt plc company logo seen displayed on a smartphone.
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U.S. industrial company Parker-Hannifin has agreed a £6.3 billion ($8.8 billion) deal to buy British defense and aerospace company Meggitt, the companies announced Monday.
The deal, which will see Parker pay 800 pence per share, sent Meggitt stock soaring more than 55% during morning trade in Europe. Parker’s offer carries a 70.5% premium to Meggitt’s closing share price on Friday. The Cleveland-based company’s shares were roughly flat in premarket trading stateside.
In the announcement, Parker said it believed the acquisition would be “strategically and culturally compelling” and enhance its future prospects within aerospace and defense. The deal almost doubles the size of Parker’s Aerospace Systems division.
Parker has also made a series of commitments to the British government as part of the deal, including maintaining Meggitt’s U.K. headquarters, ensuring a majority of U.K. nationals remain on the company’s board, and keeping the existing R&D, engineering and manufacturing headcount in the U.K.
“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,” said Parker Chairman and CEO Tom Williams.
“During our longstanding presence in the U.K. we have built great respect for Meggitt, its heritage, and its place in British industry.”
Meggitt Chairman Nigel Rudd said he was confident that the U.S. giant would be a “responsible steward” of the company going forward.
“Whilst Meggitt is currently pursuing a strong, standalone strategy which will deliver value to shareholders over the long-term, Parker’s offer provides the opportunity to significantly accelerate and de-risk those plans, while continuing to deliver for shareholders,” Rudd said.
“Parker’s offer also includes far-reaching commitments that will ensure that Meggitt remains a significant presence in the UK, increasing investment in research and development, and increasing the number of apprenticeship opportunities.”