The Business Secretary has dismissed concerns over speculators buying up shares to swing the vote in the hostile bid to take over GKN.
Greg Clark said investors who sold up in recent weeks had chosen effectively not to back the company's management.
Public companies are "constantly under scrutiny" from alternative managements "who say they can do a better job" and no firm is "immune", he said.
Mr Clark also dismissed claims by former defence secretary Lord Heseltine that other countries would block such a takeover.
The Tory peer has called for the deal to be stopped on national security grounds.
Lord Heseltine is "not right that other countries do not have a similar approach", Mr Clark told BBC Radio 4's Today programme.
"Our practice is very consistent with those of other competitors," he added.
Melrose succeeded in its hostile bid to take over GKN for £8.1 billion after securing the backing of the engineering giant's shareholders.
A total of 52.43% investor votes were cast in favour of the deal going ahead, just above the 50% plus one share threshold.
Liberal Democrat leader Vince Cable said that Melrose's victory was only secured "through votes from short-term speculators", a reference to the large number of hedge funds that make up GKN's share register.
Mr Clark said: "Those shareholders that bought their shares very recently of course bought them from other shareholders that chose not in effect to back the continuing management.
"The approach that we have reinforced in our industrial strategy very explicitly is not to have a protectionist approach, not to pick winners as was done in the past and subsidise or protect them, but to ensure that our business environment is one in which there is competition, in which no incumbent is immune from the challenge of being kept efficient and strategically focused."
The Government has a statutory responsibility to consider whether the merger gives rise to public interest concerns.
Lord Heseltine said the takeover should be stopped on national security grounds.
"No other country of our sort would have allowed this to happen," he said. "If you have a situation where a major engineering company is up for grabs in five years time to whom, under what circumstances, then how can people enter into the long-term partnerships upon which strategic investment decisions in defence are based?"
Mr Clark refused to be drawn on whether he believed there were national security concerns about the deal because he needs to act "objectively".
GKN accepted defeat shortly after and Melrose's victory brings to a close a bitter battle that has raged since January.
The UK's aerospace and defence trade association ADS said the Government must assess whether the bid should be referred to the Competition and Markets Authority.
Melrose has stressed its takeover will improve "not only GKN, but the UK economy", committing to keeping the firm listed in London and headquartered in the UK as part of a five-year pledge.
But the takeover will spark fears for jobs after Airbus, GKN's largest customer, earlier warned it could not give any new business to the firm if the deal with the turnaround specialist went ahead.
Unions and MPs have also warned over asset stripping and flagged national security concerns.
GKN has a history that dates back to the 1900s and was instrumental in wartime manufacturing.
During the First World War, it was heavily involved in making steel for military purposes, such as shells.
After the outbreak of the Second World War, GKN produced Spitfires and specialised tanks for the D-Day landings, as well as millions of steel helmets.
GKN became a target following profit warnings in October and November after problems at its US aerospace division sent shares tumbling.
It is headquartered in Redditch and has its biggest factory in Filton near Bristol, where it employs 1,454 workers.
Other plants in the UK include Cowes, Birmingham, Luton, Telford, Kings Norton, Portsmouth, Uxbridge, Leek and Oxford.