London-listed Melrose Industries has launched a $100mn compensation scheme after a toxic chemical scare at a plant in California forced the evacuation of residents and businesses. The incident in May at a GKN Aerospace chemical tank led to the temporary closure of the Garden Grove facility in southern California, after a "thermal issue" was discovered in one of three tanks containing methyl methacrylate, a chemical used to manufacture aeroplane cabin windows. Melrose, which bought aerospace parts supplier GKN in 2018, also confirmed in an update on Tuesday that the Orange County District Attorney’s Office had closed its criminal investigation into the event.

No injuries, leaks or contamination resulted from the incident, but the plant — which generated £136mn in revenue for Melrose in 2025 — has been running at half its total output capacity since May, which has cost the aerospace and defence group about £6mn a month. Melrose said GKN had permanently decommissioned the tank involved in the incident "and has made substantial investments in safety enhancements at the facility". The FTSE 100 group said it planned to resume full operations at Garden Grove by September 28, "with a phased return to full capacity and customer deliveries during the fourth quarter"."The claims programme, which is expected to become effective in the coming weeks and remain open into 2027, will reimburse those eligible for costs associated with the evacuation, including hotel stays, meals, transportation, loss of wages, and loss of use," Melrose said.

However, claims by emergency services agencies for costs incurred in responding to the incident and potential civil enforcement penalties will be dealt with separately. Melrose’s shares rose 9 per cent on Tuesday but were still down 17.5 per cent in the year to date. In its half-year results last month, Melrose said that in addition to the monthly revenue hit from processing lower volumes at Garden Grove, the group expected additional exceptional costs of £25mn to £30mn in the second half of the year.

It also paused its £175mn share buyback programme while it assessed the full financial impact of the incident.