GKN: Proposed Takeover by Melrose

Paul Sweeney Excerpts

Tuesday 27th March 2018 Commons Chamber

[Greg Clark]

These are all precisely the issues on which Melrose is required to reach agreement with the Ministry of Defence, for all the reasons that the hon. Gentleman states.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The Secretary of State perhaps has a somewhat nostalgic view of what shareholders might do in the interests of this company. From the litany of disastrous takeovers in years gone by, it is clear that shareholders often do not act in the best long-term operational and industrial interests of British industry, and we need to challenge that in this House in redefining company law. Given that Melrose’s practices are at odds with the ambition of GKN, will the Secretary of State consider whether the five-year time limit is long enough? Does he agree that we should consider reforming company law to ensure that shareholders genuinely act in the long-term industrial interests of British industry?

[Greg Clark]

I hope the hon. Gentleman will reflect that this is the first time a set of concerns outside a Secretary of State’s statutory powers has been laid before a bidding company, with the ability to discharge them through legally binding undertakings. I was very clear that section 172 of the Companies Act embodies a range of commitments that go beyond those just to shareholders. I hope the hon. Gentleman would agree that, by taking the action I have, I have reflected the wider concerns that exist.