(Bloomberg) -- Parker-Hannifin Corp., the U.S. maker of motion control systems, agreed to buy Meggitt Plc for 6.3 billion pounds ($8.8 billion) in cash to build out its defense and aerospace business.
The price of 800 pence a share is a 71% premium to Meggitt’s closing price on July 30.
By adding Meggitt, Parker Hannifin will be able to better compete in a rebounding aerospace industry. Airbus SE and Boeing Co. are increasing production after the coronavirus crisis caused the biggest slump in aviation history.
“We strongly believe Parker is the right home for Meggitt,” said Parker Chief Executive Officer Tom Williams in a statement. “Together, we can better serve our customers through innovation, accelerated R&D and a complementary portfolio of aerospace and defense technologies.”
Parker Hannifin, founded in 1917, has a significant U.K. presence, providing hydraulics, pneumatics and acting as a defense supplier to the U.K. government.
Meggitt shares had been rising on takeover speculation, with a report in May 2021 saying Woodward Inc. was looking at a potential deal and the Times reporting this month that a mystery bidder had approached the company.
The deal is the latest example of overseas buyers eyeing U.K. aerospace, with Ultra Electronics Holding Plc receiving a 2.6 billion-pound buyout approach from Cobham Ltd. and Senior Plc said to have been approached too.
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