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UK approves £4bn takeover of defence company Cobham UK approves £4bn takeover of defence company Cobham
(about 2 hours later)
The government has approved a US private equity firm's takeover of UK defence and aerospace firm Cobham. A takeover of UK defence company Cobham by a US private equity firm has been approved by the government after national security risks were deemed "acceptable".
Advent International made a £4bn offer to buy Cobham in July and shareholders approved the deal last month. Shareholders approved a £4bn offer by Advent International last month.
But Cobham's founding family raised concerns about the security implications of the deal, prompting a government consultation. But Cobham's founders raised concerns about how it could affect UK access to technologies like mid-air refuelling, prompting a government consultation.
Business secretary Andrea Leadsom has now said she is satisfied any risks have been mitigated. The business secretary said she was satisfied any risks had been mitigated.
Cobham, which employs 10,000 people, is known for pioneering technology enabling the mid-air refuelling of planes. The firm, based in Wimborne, Dorset, also makes electronic warfare systems and communications for military vehicles.Cobham, which employs 10,000 people, is known for pioneering technology enabling the mid-air refuelling of planes. The firm, based in Wimborne, Dorset, also makes electronic warfare systems and communications for military vehicles.
Mrs Leadsom said the decision had been "meticulously thought over" and came after she took advice from the defence secretary and the deputy national security adviser. Defence experts said its role in air-to-air refuelling is essential for modern warfare and could raise national security issues if the company was sold.
She added: "Having considered the consultation responses and further advice from the defence secretary, I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed." But Business Secretary Andrea Leadsom said the decision had been "meticulously thought over" and came after she took advice from the defence secretary and the deputy national security adviser.
She said: "Having considered the consultation responses and further advice from the defence secretary, I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed."
The business secretary said sensitive government information would continued to be protected under the new owner and existing contracts would be honoured.The business secretary said sensitive government information would continued to be protected under the new owner and existing contracts would be honoured.
The company is also obliged to give the government prior notice of any plans to sell the whole, or elements of, Cobham's business.The company is also obliged to give the government prior notice of any plans to sell the whole, or elements of, Cobham's business.
Cobham has extensive contracts with the British military and is seen as a world leader in air-to-air refuelling technology.
Its expertise played a significant role in the Falklands War, allowing the Royal Air Force to attack the remote Port Stanley airfield.
Lady Nadine Cobham, 76, the widow of Sir Michael Cobham, who built the company up over 25 years, had suggested the deal might jeopardise the UK's capacity for mid-air refuelling in the future if parts of the company were sold off by Advent.
Speaking earlier this year to the Mail on Sunday, she said she would not accept Advent's assurances about its plans. "I don't think it would be worth the paper it's written on," she said.