At DSEI, Raytheon UK is showcasing their space VR experience.
Cobham bid for Ultra resurrects UK sovereignty concerns
Cobham has set in motion the potential takeover of UK-based Ultra Electronics, offering $3.57 billion (£2.58 billion) for the company.
The non-binding offer is worth $48.37 (£35) per Ultra Electronics share, which value rose at the news of the offer.
The UK government is aware of the proposed deal, with a spokesperson telling Shephard: ‘While this is a commercial matter for the companies involved, we are closely monitoring the transaction.’
In a notice confirming receipt of the offer, Ultra Electronics stated that its board of directors would recommend the deal to shareholders, 'subject to consideration and satisfactory resolution of other terms and arrangements, including the establishment of safeguards for the interests of Ultra’s stakeholder groups'.
Cobham indicated to the Ultra board that it ‘is minded’ to offer the UK government the appropriate undertakings ‘in respect to national security’.
A Cobham spokesperson said: ‘Cobham continues to see strong industrial logic to the combination. During our discussions, we have offered assurances that appropriate national security undertakings will be offered to the UK Government. We look forward to continuing our discussions with the Board of Ultra, with the view to creating a global defence electronics champion.’
The proposed deal has raised concerns about the sale of UK defence contractors to overseas owners.
Labour MP and member of Parliament’s defence committee, Kevan Jones, told Shephard: ‘Ultra leads the world in deployable water sensors, torpedo defence systems and electronic warfare technology, all of which are deeply tied to our defence against underwater threats.
‘The Government cannot stand by once more whilst defence technology is offshored. The Government must urgently consider acquiring a golden share in Ultra.’
Buying a golden share would give the government a veto.
Under the Enterprise Act of 2002, the UK government can intervene in mergers on public interest grounds, including national security — but there are currently no specific controls on foreign investment in the UK.
Political involvement is limited, and decisions tend to be taken on technical competition grounds by the Competition and Markets Authority.
Once it comes into force in January 2022, the National Security and Investment Act will give the government stronger powers to investigate and intervene in mergers and acquisitions that could threaten national security.
Until then, the government can legally intervene on public interest grounds only if a deal qualifies as a 'relevant merger situation' (which, in most cases, means the transaction meets a UK turnover or share of supply test).
Cobham itself was bought by US-based private equity fund Advent International last January for $5.2 billion, following approval from the UK government. The new owners proceeded to divest several areas of the business.
Cobham Aviation Services was sold to Draken International in late 2020. This year, US-based Eaton acquired Cobham Mission Systems for $2.8 billion. The company has also sold off its shares in the Airtanker consortium and divested its Aerospace Connectivity division.
More from DSEI 2021 News
October will see the EDA and its training provider, Inzpire, undertake live flying training in Hungary as part of its Helicopter Tactics Instructor course.
The UK MoD has revealed scant details about the future Type 32 frigate.
Raytheon UK and Atlas Elektronik will demonstrate the AQS-20C towed sonar's minehunting capability to the Royal Navy.
The new submarine deal has opened a rift between Australia, the US and UK on the one hand, and France on the other.
The SPIKE™ Family Multi-Purpose Missile Systems with Powerful Warheads Ensure Tactical Overmatch on Land, at Sea, and in the Air.