 over its £8 billion bid for GKN (LON: GKN)){kind=link}
The business secretary made a rare intervention to seek “binding” assurances from Melrose (LON: MRO) over its £8 billion bid for GKN (LON: GKN)
Greg Clark released a letter in which he wrote to Melrose’s chief executive, Simon Peckham. In the letter, Clark demanded that commitments are to be put into writing before shareholders vote on the takeover this week.
“As business secretary, I have a wider concern that, where important businesses are involved, takeovers should not act against the interests of our economy, employees or the broader set of stakeholders,” said Clark.
The business secretary called for a “long-term approach” from the turnaround specialist.
Peckham responded and Melrose has pledged a five-year commitment, where Melrose would maintain it’s UK listing and headquarters.
“We are British and work in the national interest,” wrote Peckham.
“We do not believe the proposed sale of GKN Driveline to Dana is in the best interests of GKN’s employees, pensioners, customers, suppliers, shareholders or the wider UK economy. In fact, I would go further – it places them at risk,” he added.
Clark carried on to say the British government may intervene in the deal further due to concerns surrounding national security, since GKN “is a longstanding supplier of components and services directly, and through a chain of suppliers, to the British Armed Forces and to security bodies in some of our allies”.
Melrose took part in discussions with the Ministry of Defence and has announced that it had agreed not to sell the group before 2023.
GKN shareholders will vote on the £8.1 billion Melrose takeover on Thursday.