Britain launches security probe into Cobham takeover
The UK launched a national security probe into a £4 billion ($5 billion) takeover bid for British defence group Cobham by a US private equity firm on 18 September.
Advent International in July offered the bid for Cobham, aided by the beneficial impact of the Brexit-hit weak pound.
Shareholders at the British company approved the deal on Monday despite vocal opposition from the founding Cobham family.
Dorset-based Cobham is known for its stake in technology enabling the mid-air refuelling of planes. The firm also makes electronic warfare systems and communications for military vehicles.
‘Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security,’ Business Secretary Andrea Leadsom said in a statement on the day.
She added that the Competition and Markets Authority watchdog would investigate the ‘national security implications of the transaction’ and provide its findings next month.
‘The government's goals are to support private sector innovation whilst safeguarding the public interest,’ Leadsom said.
In late morning deals, Cobham shares slid 0.5 percent to 159.65 pence on London's second-tier FTSE 250 index, which was up 0.2 percent at 20,081.95 points.
‘A muted share price reaction... suggests, rightly or wrongly, that the market expects the deal to go through,’ said Russ Mould, investment director at broker AJ Bell.
‘While there may have been an element of opportunism to Advent's approach, it is certainly not the first overseas firm to take advantage of sterling weakness to acquire UK assets at a discount,’ he said.
More from Defence Notes
-
![Can the Trump administration overcome the Pentagon's multiple capability integration issues?]()
Can the Trump administration overcome the Pentagon's multiple capability integration issues?
Better integration of systems and sensors across the branches will be critical to ensuring deterrence and readiness.
-
![Trump enters the White House promising into bring the US military to a “golden age”]()
Trump enters the White House promising into bring the US military to a “golden age”
The returning US president also reiterated a commitment to supply the services with “made-in-America” capabilities and to end conflicts worldwide.
-
![Incoming Irish government backs plans for larger defence force]()
Incoming Irish government backs plans for larger defence force
It has been more than six weeks since the Irish general election. After long negotiations, a coalition of two of the three largest parties and independents has resulted in a Programme for Government (PfG) which will form the basis of a government almost guaranteed to be formed on 22 January.
-
![Top-level commitments but no meat in UK Defence Industrial Strategy’s Statement of Intent]()
Top-level commitments but no meat in UK Defence Industrial Strategy’s Statement of Intent
The initial document focused more on creating the right partnerships and inspiring investment in defence than on any details of how future UK Armed Forces would be armed.
-
![UK begins process on new industrial strategy]()
UK begins process on new industrial strategy
The first stage of developing a new UK Defence Industrial Strategy has highlighted failings in current structures with solutions expected to be proposed in next year’s full strategy.
-
![Romanians put pro-Russian candidate into presidential runoff even as the government spends west]()
Romanians put pro-Russian candidate into presidential runoff even as the government spends west
Romania joined NATO more than two decades ago and the country is vital to the alliance’s geographic reach and its ability to supply Ukraine with weapons.
