Crash Reports Premature, as Chinese Purchase of British Airplane-Parts Maker Takes Off

A Chinese buyer completed its acquisition of British airplane-component maker Northern Aerospace Ltd. despite earlier fears that a security probe had sunk the deal.

Gardner Aerospace Holdings Ltd., the British unit of Chinese aerospace and mining firm Shaanxi Ligeance Mineral Resources Co. Ltd., confirmed it had completed the deal in a Tuesday posting on its website.

Gardner had previously agreed to buy Northern Aerospace for around $58 million. But the deal hit some turbulence last month when Britain’s secretary of state for business, energy and industrial strategy ordered the Competitions & Markets Authority (CMA) to investigate the transaction on national security grounds.

Earlier this month, Northern Aerospace’s owner, private equity firm Better Capital PCC Ltd., said the two sides had abandoned the deal because they had not received CMA clearance in time to meet their own internal deadline to close the purchase. But the clearance came on July 20, with the CMA ruling that the deal posed no competition issues and that Northern Aerospace’s sales of a component to a defense company with a relationship with the British Ministry of Defence was not a security threat.

The circumstances behind the deal’s revival were not explained in Gardner’s announcement that the purchase had been completed. “The coming together of these two companies creates a business with revenues in excess of $300 million and moves us nicely along our path to becoming a global top-five aerospace detailed parts manufacturing company by 2022,” Gardner Executive Chairman Nick Sanders said in the statement.

Last year, Gardner announced that it was building a 45,000-square-meter (11.1-acre) manufacturing facility in Chengdu, capital of Southwest China’s Sichuan province, as it looks to replicate its European offerings in the Chinese market, according to the release announcing the deal’s completion.

While the U.S. has increased its scrutiny of Chinese investment in its companies in the last two years, the U.K. has proved a relatively more-welcoming environment for deals in such sensitive areas as microchips, telecommunications and aerospace. But even the U.K. has shown signs of paying closer scrutiny, as reflected in a report released last week that detailed government concerns about the risks posed by products from Chinese telecom-equipment giant Huawei Technologies Co. Ltd.

Contact reporter Ke Dawei (daweike@caixin.com)