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GKN sale approved by government

Listen: MP seeking assurances over jobs

The sale of one of the region's biggest engineering companies - to an investment firm - has been approved.

GKN employs about 2,000 people at its sites in Filton and Avonmouth.

The government approved its sale to the US investment firm Melrose Industries despite concerns about job losses.

Labour had wanted the hostile takeover to be stopped on grounds of national security, but Business Secretary, Greg Clark, told the Commons he'd received a number of assurances from the new owners.

Darren Jones, Labour MP for Bristol North West, said he still needed assurances jobs will be safe.

If GKN is sold again, will it be to a British company?

GKN statement

House of Commons

Parliament

Frank Field
HoC

Labour chair of the Work and Pensions Committee Frank Field asks whether GKN will be sold to another British company if another buyer is eventually sought.

Greg Clark replies that "for the first time in a UK takeover", the UK government has obtained the right to approve any future buyer.

This is a "very significant step forward", he adds.

Short term shareholders 'highly destabilising' - Vince Cable

GKN statement

House of Commons

Parliament

Sir Vince Cable
HoC

Lib Dem leader Sir Vince Cable says short-term shareholders acquired 20% of the stock, "forcing through the takeover and now short-selling".

He asks the Business Secretary if he agrees that the role of such shareholders has been "highly destabilising".

Greg Clark replies that Sir Vince was not persuaded by arguments for differential voting rights for shareholders when he was business secretary himself.

He says he takes a "great interest" in making sure the UK code of corporate governance is "the best in the world".

Committee chair: Look again at the takeover code

GKN statement

House of Commons

Parliament

Rachel Reeves
HoC

Labour's Rachel Reeves, who chairs the Business, Energy and Industrial Strategy Committee, asks the government to look again at the takeover code.

She says other countries have time limits on how long shareholders must own shares before seeking a takeover of the company.

Greg Clark says that her committee asked for undertakings to be given, and he has since persuaded the company to go further after they were not initially happy at the undertakings offered.

He says that time-limited voting rights are something the committee can review.

SNP MP seeks assurances on jobs

GKN statement

House of Commons

Parliament

Drew Hendry
HoC

SNP business spokesman Drew Hendry says traders have been betting against Melrose "making a success" of GKN after the takeover.

He asks what assurances have been given about protecting skilled jobs.

Greg Clark says Melrose has committed to five years of investment in research and development.

He adds that obtaining commitments from a future bidder may well contradict business commitments to the current owner.

"In terms of debt", he says, the debt of the previous business was higher than anticipated, and it is planned that the new management will pay that down, he tells MPs.

Labour: UK takeover regulation 'inadequate'

GKN statement

House of Commons

Parliament

Rebecca Long-Bailey
HoC

Shadow business secretary Rebecca Long-Bailey says protection for GKN companies is inadequate, outside the "small remit" where the government has sought assurances.

She adds that there have been no "post-offer undertakings" on many aspects of the business.

The "short termist" outlook of Melrose will not be good for defence contracts, she tells MPs.

Calling the UK's takeover regime "inadequate", she says ministers are often unable to act for employees or the public interest.

In reply Greg Clarke says a takeover of a British firm by another has never been blocked on national security grounds.

Current government powers over takeovers were created by the previous Labour government, he says.

88.5% of GKN shareholders have agreed to takeover - Clark

GKN statement

House of Commons

Parliament

Greg Clark
HoC

Business, Energy and Industrial Strategy Secretary Greg Clark says that as of last Friday, 88.5% of GKN shareholders had approved of the takeover of Melrose.

He says the defence secretary has advised him of safeguards in the case of changes to GKN's business, which provides engineering to the UK government in the defence sector.

There will be assurances that there are protections for national security and the current business model will be maintained for five years, he adds.

At the least, research and development will remain at the current level for the next financial year, he says - adding that Melrose has agreed to meet him every six months to discuss the business.

His judgement is that there are no reasonable and proportionate grounds to make an intervention on national security grounds, he tells MPs.

Commons hears statement on GKN

GKN Statement

House of Commons

Parliament

GKN flag
Reuters

The Commons is hearing a statement from Business Secretary Greg Clark on GKN.

At the end of March, it was announced that Melrose would buy engineering firm GKN for £8bn. Criticism was levied from Labour at the government, who said they waited too long to intervene in the process.

Labour have called Melrose a "short-termist asset-stripper" and have condemned the deal.

GKN employs 58,000 people worldwide, 6,000 of them in the UK. The deal drew criticism from government, unions and GKN customers.

GKN board resigns

The board of directors at Worcestershire engineering giant GKN have stepped down following the controversial takeover by Melrose Industries.

GKN worker
GKN

Melrose said an "in-depth review" of the Redditch-based firm was now under way with the government expected to waive through the £8.1bn deal as early as next week.

Melrose chairman Christopher Miller said: "We are pleased to make binding commitments to the UK and other governments around the world about our commitment to GKN and to national security."

The offer has now become wholly unconditional after Melrose won acceptances from investors who hold about 85% of GKN.

£42m each for Melrose bosses ahead of GKN takeover

BBC Business News

Four Melrose bosses trousered nearly £42m each last year, ahead of their successful £8.1bn bid for Redditch-based GKN.

Its annual report showed four executives benefited from the payout of a five-year long-term incentive plan, which meant they were handed an extra £41.7m each on top of their salaries for 2017.

A pile of money
Getty Images

Executive chairman Christopher Miller, executive vice chairman David Roper, chief executive Simon Peckham, and group finance director Geoffrey Martin all cashed-in.

The company's remuneration committee said: "We believe that this remuneration strategy has also directly driven historical outperformance when compared with our competitors and supported the company's success.

The bosses are in line for similar payouts in 2020.

Melrose won control of GKN last month after getting support from the majority of investors.