13th Oct 2026 10:30
(Alliance News) - Melrose Industries PLC on Tuesday said that US authorities had begun the process of winding up their investigation into one of the company's sites in California, after a major safety incident in May.
The Birmingham, England-based aerospace and defence company had been subject to a civil investigation by the Orange County District Attorney's Office, which closed its criminal investigation in August without bringing charges.
The incident in question took place place at the Garden Grove facility, operated by Melrose subsidiary GKN Aerospace Transparency Systems, which designs and manufactures advanced military and commercial transparencies and provides aftermarket support services.
It involved a problem with a tank storing methyl methacrylate, leading to the evacuation of about 50,000 people in the surrounding area.
According to Melrose, the DA's office on Monday filed the necessary documents to move towards a resolution of the investigation.
This included an agreed upon final judgement, an operational safety plan, details of a USD100 million claims programme for residents and businesses impacted by the incident, which Melrose has previously disclosed, as well as confirmation of USD15 million in civil enforcement penalties owed by the company, plus claims from emergency services and other authorities, which so far amount to USD10 million.
The claims programme is expected to start within a few days of the court approving the settlement, which is still pending.
"Separately, we are engaged in ongoing mediation discussions regarding the various pending civil class action lawsuits," Melrose said. It is still reviewing its insurance position.
It added that GKN "has made significant progress preparing the facility to resume full operations" and subject to approval, it plans to initiate a phased return to full capacity in the fourth quarter.
Melrose shares rose 4.2% to 468.50 pence each on Tuesday morning in London, having slumped 11% over the past six months, and fallen 25% over the past year.
In July, the FTSE 100 listing said the incident reduced first-half revenue by GBP16 million and adjusted operating profit by GBP9 million.
At the time, Melrose paused its GBP175 million share buyback programme pending greater clarity on the financial impact, including regulatory and legal proceedings.
Melrose will release trading update for the four months ended October 31 on November 18.
By Holly Munks, Alliance News reporter
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