Cobham has said it is “committed to protecting the continuity of supply to the UK” following the announcement of its takeover of Ultra Electronics.
US-owned Cobham said agreement had been reached to buy UK-based Ultra, a key supplier to the Ministry of Defence, in a £2.57bn deal.
Concerns have been expressed over the acquisition, with business secretary Kwasi Kwarteng reported to have ordered officials to investigate and monitor the takeover.
Former Royal Navy chief Admiral Lord West is also reported to have reservations about UK security and military capabilities as a result of the deal, as well as US-based Parker-Hannifin’s proposed £6.3bn takeover of British defence technology firm Meggitt.
Ultra supplies equipment connected with submarine-hunting sonar and Typhoon fighter jets.
Cobham, formerly a British business, was bought in January 2020 for £4bn by US private equity firm Advent International, which attracted criticism for selling off parts of the company.
Shonnel Malani, chairman of the Cobham Group, said: “We believe Cobham and Ultra’s complementary capabilities delivering mission critical technology will be significantly enhanced through the combination of the two groups, enabling the development of higher performance solutions for our customers.
“We recognise the important role that a combined Cobham and Ultra will play in ‘five-eyes’ [UK, US, Canada, Australia and New Zealand] defence and are committed to protecting the continuity of supply to the UK and our allies. We look forward to working with HM government, and other relevant stakeholders, to agree legally binding commitments which safeguard Ultra’s contribution to the UK economy and national security.”
In November 2020 the House of Commons’ Defence Committee launched a Sub-Committee on Foreign Involvement in the Defence Supply Chain to look at the impact of Covid-19 on defence supply chains and their susceptibility to foreign buy-outs.
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