British engineering firm Meggitt saw its shares rocket nearly 60 per cent on the London Stock Exchange this morning after US tech firm Parker tabled some £6.3bn for the firm.
Shares were up an eyewatering 59.5 per cent just after opening but steadied to 54.6 per cent in its afternoon trading at 725.4p per share.
The deal is set to bolster the combined company’s presence in the defence and aerospace sector, to create a global giant.
The merger will not only boost Meggitt’s defence and aerospace portfolio but accelerate its research and development (R&D) capabilities.
“During our longstanding presence in the UK, we have built great respect for Meggitt, its heritage, and its place in British industry. Our own journey over more than 100 years has taught us the importance of a strong culture and reputation,” Parker CEO Tom Williams said.
Parker is set to issue 800p per Meggitt share with a premium of around 73.8 per cent.
“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,” Meggitt chairman Nigel Rudd said.
The merger will offer “stronger value” for customers, Parker said in a statement, adding that the combined group will be able to maximise its geographic footprint to create a stronger global firm.
The companies both have established manufacturers in the UK, which serve as defence suppliers to the UK and US governments as well as governments across Europe.