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'''Melrose Industries plc''' is a British manufacturing company based in [[London]], England. It specialises in buying, investing in, and divesting engineering companies. Its shares are listed on the [[London Stock Exchange]] as a constituent of the [[FTSE 100 Index]]. Melrose serves customers in the United Kingdom and United States.
'''Melrose Industries plc''' is a British manufacturing company based in [[London]], England. It specialises in buying, investing in, and divesting engineering companies. Its shares are listed on the [[London Stock Exchange]] as a constituent of the [[FTSE 100 Index]]. Melrose serves customers in the United Kingdom and United States.


Melrose Industries was founded in 2003 by David Roper, Christopher Miller and Simon Peckham. In terms of business practices, the company aims to buy and turn around underperforming businesses. Melrose has acquired, and in some cases also sold numerous engineering companies including Dynacast, McKechnie, [[FKI (company)|FKI]], Elster, Nortek, and [[GKN]]. Its acquisition techniques have allegedly included [[Takeover#Hostile|hostile takeover]] tactics;<ref name = "hostile sweetner"/> Melrose has also been publicly criticised for issuing high paying performance linked incentive schemes to its top executives.<ref name = "highpay 2019"/>
Melrose Industries was founded in 2003 by David Roper, Christopher Miller and Simon Peckham. In terms of business practices, the company aims to buy and turn around underperforming businesses. Melrose has acquired and in some cases also sold numerous engineering companies including Dynacast, McKechnie, [[FKI (company)|FKI]], Elster, Nortek, and [[GKN]]. Its acquisition techniques have allegedly included [[Takeover#Hostile|hostile takeover]] tactics;<ref name = "hostile sweetner"/> Melrose has also been publicly criticised for issuing high paying performance linked incentive schemes to its top executives.<ref name = "highpay 2019"/>


==History==
==History==
[[File:Aspiration, Leconfield House, Curzon Street W1.JPG|thumb|240px|Sculpture at Melrose's head office at [[Leconfield House]] in [[Curzon Street]], London]]
[[File:Aspiration, Leconfield House, Curzon Street W1.JPG|thumb|240px|Sculpture at Melrose's head office at [[Leconfield House]] in [[Curzon Street]], London]]
In 2003, Melrose Industries was launched on London's [[Alternative Investment Market]] with an initial market capitalisation of £10m; it had been established that same year by three individuals: David Roper, Christopher Miller and Simon Peckham.<ref name = "trioguardian 2018">{{cite news |url=https://www.theguardian.com/business/2018/mar/29/melrose-trio-gkn-christopher-miller-david-roper-simon-peckham |newspaper=The Guardian |title=Melrose trio who sought biggest deal yet with GKN – and biggest challenge |first=Julia |last=Kollewe |date=29 March 2018 |access-date=6 January 2020 }}</ref> For many years, the three founders have been directly involved in managing the company; between 2003 and 2010, Melrose was headed by David Roper.<ref name = "cofounder leaves2020"/>
In 2003, Melrose Industries was launched on London's [[Alternative Investment Market]] with an initial market capitalisation of £10m; it had been established that same year by three individuals: David Roper, Christopher Miller, and Simon Peckham.<ref name = "trioguardian 2018">{{cite news |url=https://www.theguardian.com/business/2018/mar/29/melrose-trio-gkn-christopher-miller-david-roper-simon-peckham |newspaper=The Guardian |title=Melrose trio who sought biggest deal yet with GKN – and biggest challenge |first=Julia |last=Kollewe |date=29 March 2018 |access-date=6 January 2020 }}</ref> For many years, the three founders have been directly involved in managing the company; between 2003 and 2010, Melrose was headed by David Roper.<ref name = "cofounder leaves2020"/>


Melrose acquired Dynacast, a manufacturer of diecast parts and components, and McKechnie, an engineering group, in 2005;<ref>{{cite web |url=https://www.telegraph.co.uk/finance/2914306/Melrose-engineers-429m-deal.html |title=Melrose engineers £429m deal |date=22 April 2005 |publisher=The Telegraph |access-date=10 April 2016}}</ref> it divested both McKechnie Aerospace and McKechnie PSM in exchange for $855m two years later.<ref>{{cite web |url = http://uk.reuters.com/article/basicIndustries/idUKL2359268120070326 |title = Melrose sells McKechnie Aerospace in $856m deal |publisher = Reuters |date = 26 March 2007}}</ref> In early 2008, it bought [[FKI (company)|FKI]], an engineering business that included the [[Brush Turbogenerators]] unit, in a £480m deal.<ref name=fki>{{cite web |url=https://next.ft.com/content/04e175b6-0fd7-11dd-8871-0000779fd2ac |title=FKI accepts £480m bid from Melrose |date=22 April 2008 |publisher=FT |access-date=10 April 2016}}</ref> The company opted to sell on Dynacast for $590m in 2011.<ref>{{cite web |url=http://www.ft.com/cms/s/0/30a8aed8-9055-11e0-9227-00144feab49a.html |title=Melrose sells Dynacast for $590m |work=Financial Times |access-date=30 March 2015}}</ref> During June 2012, Melrose sold McKechnie Plastic Components to Swedish firm Rosti for £30.7m.<ref>{{cite web |url=http://www.insidermedia.com/insider/yorkshire/72662-melrose-sells-70m-turnover-mckechnie/ |title=Melrose sells £70m turnover McKechnie |publisher=Insider Media |date = 26 June 2012 |access-date=10 April 2016}}</ref>
Melrose acquired Dynacast, a manufacturer of diecast parts and components, and McKechnie, an engineering group, in 2005;<ref>{{cite web |url=https://www.telegraph.co.uk/finance/2914306/Melrose-engineers-429m-deal.html |title=Melrose engineers £429m deal |date=22 April 2005 |publisher=The Telegraph |access-date=10 April 2016}}</ref> it divested both McKechnie Aerospace and McKechnie PSM in exchange for $855m two years later.<ref>{{cite web |url = http://uk.reuters.com/article/basicIndustries/idUKL2359268120070326 |title = Melrose sells McKechnie Aerospace in $856m deal |publisher = Reuters |date = 26 March 2007}}</ref> In early 2008, it bought [[FKI (company)|FKI]], an engineering business that included the [[Brush Turbogenerators]] unit, in a £480m deal.<ref name=fki>{{cite web |url=https://next.ft.com/content/04e175b6-0fd7-11dd-8871-0000779fd2ac |title=FKI accepts £480m bid from Melrose |date=22 April 2008 |publisher=FT |access-date=10 April 2016}}</ref> The company opted to sell on Dynacast for $590m in 2011.<ref>{{cite web |url=http://www.ft.com/cms/s/0/30a8aed8-9055-11e0-9227-00144feab49a.html |title=Melrose sells Dynacast for $590m |work=Financial Times |access-date=30 March 2015}}</ref> During June 2012, Melrose sold McKechnie Plastic Components to Swedish firm Rosti for £30.7m.<ref>{{cite web |url=http://www.insidermedia.com/insider/yorkshire/72662-melrose-sells-70m-turnover-mckechnie/ |title=Melrose sells £70m turnover McKechnie |publisher=Insider Media |date = 26 June 2012 |access-date=10 April 2016}}</ref>


During August 2012, it acquired Elster, a metering business, for $2.3bn.<ref name=elster>{{cite web |url=https://www.bloomberg.com/news/2012-06-29/melrose-agrees-to-buy-elster-for-2-3-billion-to-add-metering.html |title=Melrose to Acquire Elster for $2.3 Billion to Add Metering |publisher=Bloomberg L.P. |date=29 June 2012 |access-date=26 June 2014}}</ref> In July 2015, Melrose sold Elster to American engineering conglomerate [[Honeywell]] in a £3.3bn deal;<ref>{{cite web |url=https://next.ft.com/content/efd7b43c-34f9-11e5-bdbb-35e55cbae175 |title=Melrose shares soar on £3.3bn sale of Elster to Honeywell |date=28 July 2015 |access-date=10 April 2016}}</ref><ref>{{cite web |url = https://www.wsj.com/articles/melrose-sells-elster-to-honeywell-for-5-1-billion-1438065494 |title = Honeywell Pays $5.1 Billion for German-Based Elster |publisher = Wall Street Journal |first = Alex |last = MacDonald |date = 28 July 2015}}</ref> of this windfall, £2bn was distributed to Melrose's investors while the remainder went to other corporates purposes, including debt reduction.<ref>{{cite web |url = https://www.telegraph.co.uk/finance/newsbysector/industry/engineering/11767786/Melrose-investors-in-line-for-2bn-payout-after-Honeywell-buys-Elster.html |title = Melrose investors in line for £2bn payout after Honeywell buys Elster |publisher = The Telegraph |first = Alan |last = Tovey |date = 28 July 2015}}</ref>
During August 2012 it acquired Elster, a metering business, for $2.3bn.<ref name=elster>{{cite web |url=https://www.bloomberg.com/news/2012-06-29/melrose-agrees-to-buy-elster-for-2-3-billion-to-add-metering.html |title=Melrose to Acquire Elster for $2.3 Billion to Add Metering |publisher=Bloomberg L.P. |date=29 June 2012 |access-date=26 June 2014}}</ref> In July 2015, Melrose sold Elster to American engineering conglomerate [[Honeywell]] in a £3.3bn deal;<ref>{{cite web |url=https://next.ft.com/content/efd7b43c-34f9-11e5-bdbb-35e55cbae175 |title=Melrose shares soar on £3.3bn sale of Elster to Honeywell |date=28 July 2015 |access-date=10 April 2016}}</ref><ref>{{cite web |url = https://www.wsj.com/articles/melrose-sells-elster-to-honeywell-for-5-1-billion-1438065494 |title = Honeywell Pays $5.1 Billion for German-Based Elster |publisher = Wall Street Journal |first = Alex |last = MacDonald |date = 28 July 2015}}</ref> of this windfall, £2bn was distributed to Melrose's investors while the remainder went to other corporates purposes, including debt reduction.<ref>{{cite web |url = https://www.telegraph.co.uk/finance/newsbysector/industry/engineering/11767786/Melrose-investors-in-line-for-2bn-payout-after-Honeywell-buys-Elster.html |title = Melrose investors in line for £2bn payout after Honeywell buys Elster |publisher = The Telegraph |first = Alan |last = Tovey |date = 28 July 2015}}</ref>


On 29 September 2015, Melrose Industries [[Incorporation (business)|incorporated]] a new corporate structure.<ref>{{cite web |url=https://beta.companieshouse.gov.uk/company/09800044/ |title=Melrose Industries Plc |publisher=[[Companies House]] |access-date=6 January 2020 |quote=Incorporated on 29 September 2015 }}</ref> During the late 2010s, the company was reportedly subject to vigorous criticism over the generosity of its long-term bonus scheme, which paid out £167m to Melrose's four bosses over its performance in 2018, during which revenues and profits had both dramatically increased.<ref name = "highpay 2019">{{cite web |url = https://www.telegraph.co.uk/business/2019/03/30/melrose-feels-heat-payouts-top-executives/ |title = Melrose feels the heat over payouts to top executives |publisher = The Telegraph |first = Alan |last = Tovey |date = 30 March 2019}}</ref><ref>{{cite web |url = https://www.cipd.co.uk/about/media/press/150818-ftse-ceo-pay |title = Total FTSE 100 Chief Executive pay has increased by 11% in the past year |publisher = cipd.co.uk |date = 15 August 2018}}</ref><ref>{{cite web |url = https://www.insidermedia.com/news/midlands/melrose-revenue-smashes-2bn-mark |title = Melrose revenue smashes £2bn mark |publisher = insidermedia.com |first = Jon |last = Robinson |date = 20 February 2018}}</ref> Melrose has reportedly gained the backing of multiple leading market institutions, such as [[Schroders]] and [[FIS (company)|Fidelity]].<ref name = "trioguardian 2018"/>
On 29 September 2015, Melrose Industries [[Incorporation (business)|incorporated]] a new corporate structure.<ref>{{cite web |url=https://beta.companieshouse.gov.uk/company/09800044/ |title=Melrose Industries Plc |publisher=[[Companies House]] |access-date=6 January 2020 |quote=Incorporated on 29 September 2015 }}</ref> During the late 2010s, the company was reportedly subject to vigorous criticism over the generosity of its long-term bonus scheme, which paid out £167m to Melrose's four bosses over its performance in 2018, during which revenues and profits had both dramatically increased.<ref name = "highpay 2019">{{cite web |url = https://www.telegraph.co.uk/business/2019/03/30/melrose-feels-heat-payouts-top-executives/ |title = Melrose feels the heat over payouts to top executives |publisher = The Telegraph |first = Alan |last = Tovey |date = 30 March 2019}}</ref><ref>{{cite web |url = https://www.cipd.co.uk/about/media/press/150818-ftse-ceo-pay |title = Total FTSE 100 Chief Executive pay has increased by 11% in the past year |publisher = cipd.co.uk |date = 15 August 2018}}</ref><ref>{{cite web |url = https://www.insidermedia.com/news/midlands/melrose-revenue-smashes-2bn-mark |title = Melrose revenue smashes £2bn mark |publisher = insidermedia.com |first = Jon |last = Robinson |date = 20 February 2018}}</ref> Melrose is said to have gained the backing of multiple leading market institutions, such as [[Schroders]] and [[FIS (company)|Fidelity]].<ref name = "trioguardian 2018"/>


In July 2016, the company acquired Nortek, a ventilation equipment manufacturer, for £2.2 billion.<ref name=nortek>{{cite web |url=https://www.telegraph.co.uk/business/2016/07/06/melrose-bets-22bn-on-us-housing-growth-with-nortek-takeover/ |title=Melrose bets £2.2bn on US housing growth with Nortek takeover |publisher=The Telegraph |date=6 July 2016 |access-date=2 September 2016}}</ref> By 2018, Nortek was reporting a 52 per cent increase in adjusted operating profits across the previous year, having met its original three-to-five-year targets for the company within 18 months.<ref>{{cite web |url = https://www.investorschronicle.co.uk/shares/2018/02/20/melrose-delivers-on-nortek-pines-for-gkn/ |title = Melrose delivers on Nortek |publisher = investorschronicle.co.uk |first = Tom |last = Dines |date = 20 February 2018}}</ref>
In July 2016, the company acquired Nortek, a ventilation equipment manufacturer, for £2.2 billion.<ref name=nortek>{{cite web |url=https://www.telegraph.co.uk/business/2016/07/06/melrose-bets-22bn-on-us-housing-growth-with-nortek-takeover/ |title=Melrose bets £2.2bn on US housing growth with Nortek takeover |publisher=The Telegraph |date=6 July 2016 |access-date=2 September 2016}}</ref> By 2018, Nortek was reporting a 52 per cent increase in adjusted operating profits across the previous year, having met its original three-to-five-year targets for the company within 18 months.<ref>{{cite web |url = https://www.investorschronicle.co.uk/shares/2018/02/20/melrose-delivers-on-nortek-pines-for-gkn/ |title = Melrose delivers on Nortek |publisher = investorschronicle.co.uk |first = Tom |last = Dines |date = 20 February 2018}}</ref>
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During January 2018, Melrose Industries announced its plans to purchase [[GKN]] as well as the firm's restructuring thereafter;<ref>{{cite web |url = https://www.flightglobal.com/airframers/melrose-presents-gkn-takeover-plan-to-shareholders/126725.article |title = Melrose presents GKN takeover plan to shareholders |publisher = Flight International |first = Michael |last = Gubisch |date = 15 January 2018}}</ref> that same month, GKN's management rejected the initial bid made.<ref>{{cite web |url = https://www.flightglobal.com/systems-and-interiors/gkn-to-reorganise-after-rejecting-takeover-bid/126709.article |title = GKN to reorganise after rejecting takeover bid |publisher = Flight International |first = Michael |last = Gubisch |date = 12 January 2018}}</ref> In March 2018, Melrose submitted a revised £8.1 billion bid for the company; this bid was controversial and was subject to criticism, being branded by some press agencies as a [[Takeover#Hostile|hostile takeover]].<ref name = "hostile sweetner">{{cite web| url=https://www.bloomberg.com/news/articles/2018-01-17/melrose-makes-sweetened-10-2-billion-offer-to-acquire-gkn| title=Melrose Makes $10.2 Billion Hostile Offer to Acquire GKN| author=Phil Serafino, Benjamin D Katz| date=17 January 2018| publisher=Bloomberg| access-date=1 May 2018}}</ref><ref>{{cite web |url = https://www.theguardian.com/business/2018/mar/29/whats-the-controversy-over-melroses-hostile-takeover-of-gkn |title = What's the controversy over Melrose's hostile takeover of GKN? |first = Julia |last = Finch |work = The Guardian |date = 29 March 2018}}</ref> Melrose's offer received shareholder support and was accepted.<ref>{{cite news |url= https://www.flightglobal.com/news/articles/melrose-wins-shareholder-support-for-gkn-takeover-447212/ |title= Melrose wins shareholder support for GKN takeover |date= 29 March 2018 |first= Michael |last = Gubisch |work= Flightglobal}}</ref><ref>{{cite news| url=https://www.wsj.com/articles/melrose-industries-wins-bruising-takeover-battle-for-britains-gkn-1522339171| title=Melrose Industries Wins Bruising Takeover Battle for Britain's GKN| author=Robert Wall| date=29 March 2018| newspaper=The Wall Street Journal| access-date=1 May 2018}}</ref> Following a formal review of the purchase, including of various objections put forward by GKN workers and [[trade union]]s, the UK Government allowed the transaction to proceed in April 2018;<ref name="bbc">{{cite web |url=https://www.bbc.co.uk/news/business-43594542 |title=GKN takeover concerns to be assessed by government |date=30 March 2018 |publisher=BBC News |access-date=3 April 2018}}</ref><ref>{{cite web |url = https://www.parliament.uk/business/committees/committees-a-z/commons-select/business-energy-industrial-strategy/inquiries/parliament-2017/future-of-gkn-17-19/ |title = The future of GKN inquiry: Business, Energy and Industrial Strategy Committee |publisher = parliament.uk |date = March 2018}}</ref> Melrose agreed to comply with several national security measures.<ref name="Reuters">{{cite news |url=https://www.reuters.com/article/us-gkn-m-a-melrose-inds/british-government-gives-melrose-takeover-of-gkn-the-green-light-idUSKBN1HV1U5 |title=GKN takeover given green light |date=24 April 2018 |work=Reuters |access-date=24 April 2018}}</ref>
During January 2018, Melrose Industries announced its plans to purchase [[GKN]] as well as the firm's restructuring thereafter;<ref>{{cite web |url = https://www.flightglobal.com/airframers/melrose-presents-gkn-takeover-plan-to-shareholders/126725.article |title = Melrose presents GKN takeover plan to shareholders |publisher = Flight International |first = Michael |last = Gubisch |date = 15 January 2018}}</ref> that same month, GKN's management rejected the initial bid made.<ref>{{cite web |url = https://www.flightglobal.com/systems-and-interiors/gkn-to-reorganise-after-rejecting-takeover-bid/126709.article |title = GKN to reorganise after rejecting takeover bid |publisher = Flight International |first = Michael |last = Gubisch |date = 12 January 2018}}</ref> In March 2018, Melrose submitted a revised £8.1 billion bid for the company; this bid was controversial and was subject to criticism, being branded by some press agencies as a [[Takeover#Hostile|hostile takeover]].<ref name = "hostile sweetner">{{cite web| url=https://www.bloomberg.com/news/articles/2018-01-17/melrose-makes-sweetened-10-2-billion-offer-to-acquire-gkn| title=Melrose Makes $10.2 Billion Hostile Offer to Acquire GKN| author=Phil Serafino, Benjamin D Katz| date=17 January 2018| publisher=Bloomberg| access-date=1 May 2018}}</ref><ref>{{cite web |url = https://www.theguardian.com/business/2018/mar/29/whats-the-controversy-over-melroses-hostile-takeover-of-gkn |title = What's the controversy over Melrose's hostile takeover of GKN? |first = Julia |last = Finch |work = The Guardian |date = 29 March 2018}}</ref> Melrose's offer received shareholder support and was accepted.<ref>{{cite news |url= https://www.flightglobal.com/news/articles/melrose-wins-shareholder-support-for-gkn-takeover-447212/ |title= Melrose wins shareholder support for GKN takeover |date= 29 March 2018 |first= Michael |last = Gubisch |work= Flightglobal}}</ref><ref>{{cite news| url=https://www.wsj.com/articles/melrose-industries-wins-bruising-takeover-battle-for-britains-gkn-1522339171| title=Melrose Industries Wins Bruising Takeover Battle for Britain's GKN| author=Robert Wall| date=29 March 2018| newspaper=The Wall Street Journal| access-date=1 May 2018}}</ref> Following a formal review of the purchase, including of various objections put forward by GKN workers and [[trade union]]s, the UK Government allowed the transaction to proceed in April 2018;<ref name="bbc">{{cite web |url=https://www.bbc.co.uk/news/business-43594542 |title=GKN takeover concerns to be assessed by government |date=30 March 2018 |publisher=BBC News |access-date=3 April 2018}}</ref><ref>{{cite web |url = https://www.parliament.uk/business/committees/committees-a-z/commons-select/business-energy-industrial-strategy/inquiries/parliament-2017/future-of-gkn-17-19/ |title = The future of GKN inquiry: Business, Energy and Industrial Strategy Committee |publisher = parliament.uk |date = March 2018}}</ref> Melrose agreed to comply with several national security measures.<ref name="Reuters">{{cite news |url=https://www.reuters.com/article/us-gkn-m-a-melrose-inds/british-government-gives-melrose-takeover-of-gkn-the-green-light-idUSKBN1HV1U5 |title=GKN takeover given green light |date=24 April 2018 |work=Reuters |access-date=24 April 2018}}</ref>


In October 2019, Melrose Industries announced the appointment of Funmi Adegoke to its Board as an inaugural independent non-executive Director.<ref>{{Cite web|url=https://www.insidermedia.com/news/midlands/Melrose-appoints-inaugural-non-executive-chairman|title=Melrose appoints inaugural non-executive chairman|last=Media|first=Insider|website=Insider Media Ltd|language=en|access-date=2020-03-24}}</ref><ref>{{Cite web|url=https://www.directorstalkinterviews.com/melrose-industries-plc-appoint-funmi-adegoke-as-independent-non-executive-director/412794285|title=Melrose Industries PLC Appoint Funmi Adegoke as Independent Non-Executive Director|last=Arbor|first=Giles|date=2019-10-01|website=DirectorsTalk Interviews|language=en-GB|access-date=2020-03-24}}</ref>
In October 2019, Melrose Industries announced the appointment of Funmi Adegoke to its board as an inaugural independent non-executive Director.<ref>{{Cite web|url=https://www.insidermedia.com/news/midlands/Melrose-appoints-inaugural-non-executive-chairman|title=Melrose appoints inaugural non-executive chairman|last=Media|first=Insider|website=Insider Media Ltd|language=en|access-date=2020-03-24}}</ref><ref>{{Cite web|url=https://www.directorstalkinterviews.com/melrose-industries-plc-appoint-funmi-adegoke-as-independent-non-executive-director/412794285|title=Melrose Industries PLC Appoint Funmi Adegoke as Independent Non-Executive Director|last=Arbor|first=Giles|date=2019-10-01|website=DirectorsTalk Interviews|language=en-GB|access-date=2020-03-24}}</ref>


During 2020, David Roper, one of the Melrose's three original founders, is set to step down as executive vice-chairman and depart the firm; the move was allegedly due to disagreements over recent business strategy.<ref name = "cofounder leaves2020">{{cite web |url = https://www.proactiveinvestors.co.uk/companies/news/219947/melrose-industries-says-co-founder-to-quit-trading-in-line-with-expectations-219947.html |title = Melrose Industries says co-founder to quit; trading in line with expectations |publisher = proactiveinvestors.co.uk |first = Ian |last = Lyall |date = 9 May 2019 }}</ref>
During 2020, David Roper, one of the Melrose's three original founders was set to step down as executive vice-chairman and depart the firm; the move was allegedly due to disagreements over recent business strategy.<ref name = "cofounder leaves2020">{{cite web |url = https://www.proactiveinvestors.co.uk/companies/news/219947/melrose-industries-says-co-founder-to-quit-trading-in-line-with-expectations-219947.html |title = Melrose Industries says co-founder to quit; trading in line with expectations |publisher = proactiveinvestors.co.uk |first = Ian |last = Lyall |date = 9 May 2019 }}</ref>


==Operations==
==Operations==

Revision as of 20:09, 30 August 2022

Melrose Industries plc
Company typePublic limited company
LSE: MRO
FTSE 100 component
IndustryManufacturing
Founded2003
FounderChristopher Miller
David Roper
Simon Peckham
HeadquartersLondon, England, UK
Key people
RevenueDecrease £6,883 million (2021)[1]
Increase £(451) million (2021)[1]
Increase £837 million (2021)[1]
Websitewww.melroseplc.net

Melrose Industries plc is a British manufacturing company based in London, England. It specialises in buying, investing in, and divesting engineering companies. Its shares are listed on the London Stock Exchange as a constituent of the FTSE 100 Index. Melrose serves customers in the United Kingdom and United States.

Melrose Industries was founded in 2003 by David Roper, Christopher Miller and Simon Peckham. In terms of business practices, the company aims to buy and turn around underperforming businesses. Melrose has acquired and in some cases also sold numerous engineering companies including Dynacast, McKechnie, FKI, Elster, Nortek, and GKN. Its acquisition techniques have allegedly included hostile takeover tactics;[2] Melrose has also been publicly criticised for issuing high paying performance linked incentive schemes to its top executives.[3]

History

Sculpture at Melrose's head office at Leconfield House in Curzon Street, London

In 2003, Melrose Industries was launched on London's Alternative Investment Market with an initial market capitalisation of £10m; it had been established that same year by three individuals: David Roper, Christopher Miller, and Simon Peckham.[4] For many years, the three founders have been directly involved in managing the company; between 2003 and 2010, Melrose was headed by David Roper.[5]

Melrose acquired Dynacast, a manufacturer of diecast parts and components, and McKechnie, an engineering group, in 2005;[6] it divested both McKechnie Aerospace and McKechnie PSM in exchange for $855m two years later.[7] In early 2008, it bought FKI, an engineering business that included the Brush Turbogenerators unit, in a £480m deal.[8] The company opted to sell on Dynacast for $590m in 2011.[9] During June 2012, Melrose sold McKechnie Plastic Components to Swedish firm Rosti for £30.7m.[10]

During August 2012 it acquired Elster, a metering business, for $2.3bn.[11] In July 2015, Melrose sold Elster to American engineering conglomerate Honeywell in a £3.3bn deal;[12][13] of this windfall, £2bn was distributed to Melrose's investors while the remainder went to other corporates purposes, including debt reduction.[14]

On 29 September 2015, Melrose Industries incorporated a new corporate structure.[15] During the late 2010s, the company was reportedly subject to vigorous criticism over the generosity of its long-term bonus scheme, which paid out £167m to Melrose's four bosses over its performance in 2018, during which revenues and profits had both dramatically increased.[3][16][17] Melrose is said to have gained the backing of multiple leading market institutions, such as Schroders and Fidelity.[4]

In July 2016, the company acquired Nortek, a ventilation equipment manufacturer, for £2.2 billion.[18] By 2018, Nortek was reporting a 52 per cent increase in adjusted operating profits across the previous year, having met its original three-to-five-year targets for the company within 18 months.[19]

During January 2018, Melrose Industries announced its plans to purchase GKN as well as the firm's restructuring thereafter;[20] that same month, GKN's management rejected the initial bid made.[21] In March 2018, Melrose submitted a revised £8.1 billion bid for the company; this bid was controversial and was subject to criticism, being branded by some press agencies as a hostile takeover.[2][22] Melrose's offer received shareholder support and was accepted.[23][24] Following a formal review of the purchase, including of various objections put forward by GKN workers and trade unions, the UK Government allowed the transaction to proceed in April 2018;[25][26] Melrose agreed to comply with several national security measures.[27]

In October 2019, Melrose Industries announced the appointment of Funmi Adegoke to its board as an inaugural independent non-executive Director.[28][29]

During 2020, David Roper, one of the Melrose's three original founders was set to step down as executive vice-chairman and depart the firm; the move was allegedly due to disagreements over recent business strategy.[5]

Operations

Melrose's main subsidiaries are Brush Turbogenerators,[8] GKN.[27] Nortek was a subsidiary of the company.[18]

References

  1. ^ a b c "Preliminary Results 2021" (PDF). Melrose Industries. Retrieved 3 March 2022.
  2. ^ a b Phil Serafino, Benjamin D Katz (17 January 2018). "Melrose Makes $10.2 Billion Hostile Offer to Acquire GKN". Bloomberg. Retrieved 1 May 2018.
  3. ^ a b Tovey, Alan (30 March 2019). "Melrose feels the heat over payouts to top executives". The Telegraph.
  4. ^ a b Kollewe, Julia (29 March 2018). "Melrose trio who sought biggest deal yet with GKN – and biggest challenge". The Guardian. Retrieved 6 January 2020.
  5. ^ a b Lyall, Ian (9 May 2019). "Melrose Industries says co-founder to quit; trading in line with expectations". proactiveinvestors.co.uk.
  6. ^ "Melrose engineers £429m deal". The Telegraph. 22 April 2005. Retrieved 10 April 2016.
  7. ^ "Melrose sells McKechnie Aerospace in $856m deal". Reuters. 26 March 2007.
  8. ^ a b "FKI accepts £480m bid from Melrose". FT. 22 April 2008. Retrieved 10 April 2016.
  9. ^ "Melrose sells Dynacast for $590m". Financial Times. Retrieved 30 March 2015.
  10. ^ "Melrose sells £70m turnover McKechnie". Insider Media. 26 June 2012. Retrieved 10 April 2016.
  11. ^ "Melrose to Acquire Elster for $2.3 Billion to Add Metering". Bloomberg L.P. 29 June 2012. Retrieved 26 June 2014.
  12. ^ "Melrose shares soar on £3.3bn sale of Elster to Honeywell". 28 July 2015. Retrieved 10 April 2016.
  13. ^ MacDonald, Alex (28 July 2015). "Honeywell Pays $5.1 Billion for German-Based Elster". Wall Street Journal.
  14. ^ Tovey, Alan (28 July 2015). "Melrose investors in line for £2bn payout after Honeywell buys Elster". The Telegraph.
  15. ^ "Melrose Industries Plc". Companies House. Retrieved 6 January 2020. Incorporated on 29 September 2015
  16. ^ "Total FTSE 100 Chief Executive pay has increased by 11% in the past year". cipd.co.uk. 15 August 2018.
  17. ^ Robinson, Jon (20 February 2018). "Melrose revenue smashes £2bn mark". insidermedia.com.
  18. ^ a b "Melrose bets £2.2bn on US housing growth with Nortek takeover". The Telegraph. 6 July 2016. Retrieved 2 September 2016.
  19. ^ Dines, Tom (20 February 2018). "Melrose delivers on Nortek". investorschronicle.co.uk.
  20. ^ Gubisch, Michael (15 January 2018). "Melrose presents GKN takeover plan to shareholders". Flight International.
  21. ^ Gubisch, Michael (12 January 2018). "GKN to reorganise after rejecting takeover bid". Flight International.
  22. ^ Finch, Julia (29 March 2018). "What's the controversy over Melrose's hostile takeover of GKN?". The Guardian.
  23. ^ Gubisch, Michael (29 March 2018). "Melrose wins shareholder support for GKN takeover". Flightglobal.
  24. ^ Robert Wall (29 March 2018). "Melrose Industries Wins Bruising Takeover Battle for Britain's GKN". The Wall Street Journal. Retrieved 1 May 2018.
  25. ^ "GKN takeover concerns to be assessed by government". BBC News. 30 March 2018. Retrieved 3 April 2018.
  26. ^ "The future of GKN inquiry: Business, Energy and Industrial Strategy Committee". parliament.uk. March 2018.
  27. ^ a b "GKN takeover given green light". Reuters. 24 April 2018. Retrieved 24 April 2018.
  28. ^ Media, Insider. "Melrose appoints inaugural non-executive chairman". Insider Media Ltd. Retrieved 2020-03-24.
  29. ^ Arbor, Giles (2019-10-01). "Melrose Industries PLC Appoint Funmi Adegoke as Independent Non-Executive Director". DirectorsTalk Interviews. Retrieved 2020-03-24.
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