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UK to review Melrose's hostile takeover of GKN over public interest concerns

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UK to review Melrose's hostile takeover of GKN over public interest concerns

The U.K. government will review Melrose Industries PLC's £8.1 billion hostile takeover of engineering giant GKN PLC on public interest grounds, BBC News reported March 30, citing U.K. Business Secretary Greg Clark.

On March 29, Melrose narrowly won control of GKN after 52.4% of the plane and car parts maker's shareholders accepted the takeover.

GKN had previously rejected buyout bids from the electrical equipment maker, contending that the bid undervalued the company.

According to BBC, the Labour Party has called Melrose a "short-termist asset-stripper," and has criticized the deal.

Melrose has promised that the company headquarters would remain in the U.K., and that it will not sell the aerospace business for five years. The takeover has drawn protest from GKN customers, unions and the government.

Clark appreciated Melrose's commitments but noted that government has a "statutory responsibility" to assess whether the deal raises public concerns.