The government is moving closer to approving the £2.6 billion takeover of Ultra Electronics by the private equity-owned Cobham, more than seven months after ordering an inquiry into the deal on security grounds.
Cobham, which was sold to the US-based Advent International in 2020, has agreed to extra commitments to gain political backing for the deal for the defence company that include granting the government oversight of contracts, future asset sales and business relationships, according to Bloomberg.
Cobham also agreed to set up a supervisory board on which the government is represented to oversee specific contracts, one source said, asking not to be identified as the information is confidential.
When the government ordered an inquiry into the takeover last August Kwasi Kwarteng, the business secretary, said: “The UK is open for business. However, foreign investment must not threaten our national security.”
Ultra supplies anti-submarine warfare technology for British warships and reconnaissance, patrol and spy planes. It has benefited from large investment by the UK taxpayer.
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It is understood that the Competition & Markets Authority reported its findings to the government in January, but approval for the multibillion-pound deal was held up in part by Russia’s invasion of Ukraine.
Cobham and Ultra declined to comment.
Ultra shares closed up 182p, or 5.8 per cent, at £33.42.
