Melrose’s £7.4 billion GKN approach backed by US and Canadian regulators
The bid has been cleared by the US Federal Trade Commission.
Melrose Industries has been handed a double boost in its pursuit of engineering giant GKN by winning regulatory backing in the US and Canada.
The £7.4 billion hostile bid has been cleared by the US Federal Trade Commission under its competition rules after being handed “early termination of the applicable waiting period”.
Canadian authorities have also waved the proposed deal through after its Competition Bureau sent a “no-action letter” to Melrose.
The move comes after GKN wrote to investors earlier this month to warn over the “entirely opportunistic” takeover bid, saying its inexperienced management team and short-term business model are “inappropriate” for the business.
The group also outlined a new strategic plan, which will see GKN sell off parts of its business to fund a £2.5 billion payout to investors.
Melrose has swooped on GKN after profit warnings in October and November following problems at its US aerospace division sent shares tumbling.
GKN, which employs around 58,200 staff and makes wing tips for Airbus, also ditched its incoming boss in November less than two months before he was due to take the top job as it warned over another hit in its troubled US plant.
The Redditch-based firm has responded to the unwanted attention by vowing to separate its aerospace and automotive units and hiring a new chief executive.
Shares in GKN and Melrose rose 1% and fell by 0.1% respectively in morning trading on the London Stock Exchange.