Melrose Industries has recorded an almost 6% drop in its share price after reporting a chemical incident at GKN Aerospace’s Garden Grove facility in California.

The FTSE 100 aerospace and defence firm, which owns GKN, said a thermal issue was identified in one of the site’s storage tanks, containing methyl methacrylate. Action was taken immediately by GKN’s employees and emergency services were notified.

As a result, the local fire authority made the precautionary decision to issue mandatory evacuation orders for portions of the surrounding community to protect public safety while response operations continued.

The evacuation area has been significantly reduced as of 25 May, following work from technical specialists, the emergency services and the relevant authorities to resolve the situation.

Investment director at AJ Bell, Russ Mould, said that the latest update would not have been expected by investors.

He stated: "The incident, which developed over the long weekend, involving a storage tank at the facility may not have caused ‘injuries, leaks or contamination’ but has resulted in significant evacuation orders and wider disruption to the surrounding community.

"Keeping everyone safe is obviously more important than any future financial impact but the crisis is particularly unhelpful at a time when Melrose is already under pressure thanks to the impact of the Iran war on the aviation sector."

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