Fresh calls for Government intervention in GKN takeover bid

A debate held in Westminster Hall this week heard how important the firm was to the regional and national economy.

It comes after GKN, which has a site in Telford, rejected a final £8.1 billion takeover offer from Melrose, saying it "continues to fundamentally undervalue" the engineering company.

Opening the debate on Thursday, West Bromwich West MP Adrian Bailey, said: "I sought this debate for the strategic interest it has in British manufacturing, but also because of the long-term implications it has on investment and responsible capitalism.

"GKN is of enormous strategic importance to the British economy. In 2015 it made sales of over £16 billion worldwide and contributed £1.36bn to our economy.

"It is one of the major tier one providers within the automotive and aerospace industry. GKN has held this position as one of the world's greatest number one tier providers because of its research, development and technological advances.

"Since 2000 GKN has invested over £561 million. This has created long-term, well-paid and high-skilled jobs that are of particular benefit to our regional and national economies."

During the debate, Mr Bailey also raised concerns about the impacts of a successful takeover by Melrose.

"Whatever you want to call it, Melrose has a short-term strategy that is reminiscent of the way that hedge funds work. It aims to buy and sell companies within a three and five-year window," Mr Bailey said.

"Another cause for concern is the relative size between the companies. Last year GKN had revenue in excess of £10bn compared to just over £1bn of Melrose."

Mr Bailey said the Government has the power to consider whether the takeover would be in the public interest.

"I am not here to argue GKN is a perfect company and is perfectly managed. That is widely acknowledged.

"But in terms of the contribution GKN makes to the industry as a whole, in terms of highly-paid and highly-skilled jobs, innovative research and its commitment to maintaining a strong manufacturing industry in the UK, its future development needs to be thought through.

"I believe it should prompt the Secretary of State to look at widening his powers of intervention of takeovers to broader considerations of public interest," he added.

MP Andrew Griffiths, the Government's Small Business Minister, said: "I will highlight that the Government are exploring proposals to strengthen our powers to scrutinise investment for national security purposes, which would bring our regime in line with those of other developed countries.

"The Government will continue to monitor the situation very closely over the days and weeks ahead, and I can assure honourable members that we will always act in the best interests of the country."