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| Cobham: National security fears threaten defence takeover | Cobham: National security fears threaten defence takeover |
| (32 minutes later) | |
| The government is to intervene in a US private equity firm's takeover of UK defence and aerospace firm Cobham, citing national security concerns. | The government is to intervene in a US private equity firm's takeover of UK defence and aerospace firm Cobham, citing national security concerns. |
| Advent International made a £4bn offer to buy Cobham in July and shareholders approved the deal last month. | Advent International made a £4bn offer to buy Cobham in July and shareholders approved the deal last month. |
| But Cobham's founding family raised concerns about the company's future and its connections with UK defence. | But Cobham's founding family raised concerns about the company's future and its connections with UK defence. |
| The government said it wanted to "support private sector innovation whilst safeguarding public interest". | The government said it wanted to "support private sector innovation whilst safeguarding public interest". |
| Dorset-based Cobham, which employs 10,000 people, is known for pioneering 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," said Business Secretary Andrea Leadsom. | "Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security," said Business Secretary Andrea Leadsom. |
| The Competition and Markets Authority (CMA) will investigate and carry out a review on the national security implications of the transaction. | The Competition and Markets Authority (CMA) will investigate and carry out a review on the national security implications of the transaction. |
| It must report the results of its decision by 29 October. | It must report the results of its decision by 29 October. |
| "Advent is committed to being a responsible steward of Cobham, encouraging its future growth and success. We will continue to engage constructively and cooperatively with the UK government in this part of their review," said an Advent spokesperson. | |
| National security interests | |
| The defence technology firm has had a rocky time after issuing a series of profit warnings in 2016 and 2017, which required it to raise funds from its shareholders. | The defence technology firm has had a rocky time after issuing a series of profit warnings in 2016 and 2017, which required it to raise funds from its shareholders. |
| Cobham has extensive contracts with the British military, including air-to-air plane refuelling, electronic warfare systems, and training military personnel to use software platforms in missile destroyers and fighter jets. | |
| In July, the government chose to intervene in another defence and aerospace industry deal - the £2.7bn acquisition of satellite communications operator Inmarsat by a consortium of private equity funds - after new laws were introduced in November, making it easier for the authorities to block takeover bids where there is a risk of technology being acquired by foreign firms. | |
| Inmarsat operates satellites that manage critical government communications for the UK and several other countries, particularly in emergency services, naval operations and border control. | |
| Since the Enterprise Act was introduced in 2002 the government is thought to have made 16 interventions on takeovers. It has three grounds to refer deals to the competition watchdog: national security grounds, media plurality and financial stability. | |
| It appears to have made nine on national security grounds, six for media plurality and one for financial stability. |