Government orders national security investigation into £2.6bn Cobham-Ultra Electronics deal

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Business Secretary Kwasi Kwarteng has asked the Competition and Markets Authority (CMA) to investigate aerospace firm Cobham’s proposed acquisition of defence competitor Ultra Electronics to assess any potential national security concerns.

Dorset-based Cobham Group, which is best known for its technology that enables the mid-air refuelling of planes, confirmed on Monday (August 16) it has agreed a £2.6bn deal for military technology supplier Ultra Electronics, which is listed on the London Stock Exchange.

Cobham, whose main manufacturing site is located in Wimborne, was bought by US private equity firm Advent International last year in a £4bn takeover.

Global outfit Ultra Electronics has sites across the South West including two in Dorset, Wimborne and Weymouth, as well as Cheltenham and Gloucester.

It supplies the US and UK defence programmes with systems including naval sonars and cyber security solutions.

Mr Kwarteng has tabled an Order in Parliament preventing Ultra Electronics from disclosing sensitive information to Cobham about the goods or services it provides to the Government or Britain’s armed forces.

Mr Kwarteng said: “The UK is open for business, however foreign investment must not threaten our national security,”

Bosses at Cobham have said they would agree to binding commitments to the Government, including safeguarding and supporting the UK’s national security, continuity of supply and critical capabilities in the UK, and national security clearance arrangements.

Mr Kwarteng has given the CMA until midnight on January 18, 2022, to submit its report on the takeover.

This afternoon, I instructed the @CMAgovUK to investigate the proposed acquisition of Ultra Electronics by Cobham to assess any national security concerns

The UK is open for business, however foreign investment must not threaten our national security

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— Kwasi Kwarteng (@KwasiKwarteng)

He had previously been reported to be considering an investigation into the deal under the Enterprise Act, which gives the government power to intervene on public mergers on national security grounds.

The act is set to be superseded next year by the new legislation which aims to impose tougher regulations on foreign ownership of UK companies.

Originally founded as Flight Refuelling Limited in 1934 by Sir Alan Cobham, Cobham employs 10,000 people. Its communication subsystems are used in aircraft such as the F-35 Joint Strike Fighter, the Eurofighter Typhoon as well as advanced naval vessels, satellites and military vehicles.

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