GKN PLC Share News (GKN)

By Ben Martin and Noor Zainab Hussain

March 8 (Reuters) - Melrose Industries' 7 billionpound ($9.7 billion) hostile bid for engineering group GKNgot a green light from its shareholders and the EuropeanUnion on Thursday as its takeover attempt enters a criticalstage.

British industrial turnaround specialist Melrose said 98.5percent of shareholders that voted had approved the proposeddeal and a plan to issue shares to help finance it, while theEuropean Commission has given anti-trust clearance.

A spokesman for GKN, which supplies parts for the Black Hawkmilitary helicopter and Eurofighter Typhoon, declined comment.

Melrose took its cash-and-share bid directly to GKNinvestors after the board of the FTSE 100 aerospace andautomotive parts group rejected its unsolicited approach inJanuary.

Since then, Melrose's approach for GKN, a mainstay of theUK's engineering sector, has drawn intense scrutiny from Britishpoliticians amid concerns a takeover puts jobs and GKN's pensionscheme at risk, and could compromise national security.

The battle could intensify in the coming days as under thebid timetable, March 12 is the final day on which GKN canrelease new financial information to defend itself.

The next milestone is March 19, which is the deadline forMelrose to improve its bid. So far, it has only made one offer.

Melrose's takeover attempt is complicated by talks GKN isholding with Dana Incorporated about a potential sale ofits auto business. If it agrees a sale to Dana, it could forceMelrose to lift is bid.

GKN said earlier on Thursday that under its currentturnaround plan, which does not assume a sale to Dana, itexpects to generate a recurring annual cash benefit of 153million pounds from the auto division through costs savings andother improvements by the end of 2020.($1 = 0.7207 pounds)($1 = 0.7206 pounds)(Reporting by Ben Martin in London and Noor Zainab Hussain inBengaluru; editing by Jason Neely and Alexander Smith)