Cohort of MPs call for Melrose's bid for GKN to be blocked

Lucy White
Avalon Airshow 2017
GKN makes parts for Lockheed Martin's F-35 fighter jet (Source: Getty)

A group of 16 MPs have written to business secretary Greg Clark calling for the government to block Melrose's £7.4bn hostile bid for GKN.

Led by Labour's Jack Dromey and Conservative MP Rachel MacLean, the group said Melrose's takeover "should not succeed" due to the possible risk it would pose 6,000 jobs which GKN creates in the UK.

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Last night, The Pensions Regulator (TPR) wrote to to the chair of Parliament’s Work and Pensions Committee, Frank Field, saying that it was concerned Melrose's bid could damage GKN's 32,000-member pension scheme.

"A great British engineering firm is in play and at risk of being dismembered and sold on by Melrose. We urge you to call in the takeover and investigate it in the national interest," said Dromey and MacLean's letter.

"A takeover of GKN by Melrose is highly likely to mean the break-up of GKN, and the selling on – and possible disappearance – of several of its constituent important components including its aerospace, driveline, powder metallurgy and additive divisions."

Read more: GKN pension trustees warn potential suitors including Melrose of a more than £1bn black hole

Currently government can only intervene in takeovers on the grounds of national security, media plurality and financial stability.

So the letter added that "GKN’s extensive role in the UK defence industry places its future firmly in the national interest, as an independent company, not a subsidiary of Melrose".

UK and US officials have been examining the bid on national security grounds, as Melrose makes components for military aircraft including the F-35 stealth fighter and the new B-21 bomber.

A number of other MPs, including the chair of the Business, Energy and Industrial Strategy (Beis)'s select committee Rachel Reeves and the Liberal Democrat leader Vince Cable, have expressed concern about the takeover.

Melrose and GKN bosses and union representatives were in front the Beis committee this morning.

Read more: GKN workers set to lobby parliament against Melrose bid as results show sliding profits

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