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UK government intervenes £2.6bn takeover bid of Ultra Electronics

UK government intervenes £2.6bn takeover bid of Ultra Electronics
UK government intervenes £2.6bn takeover bid of Ultra Electronics

The decision comes post the competition regulator’s verdict to assess the risk on national security

The latest takeover of the British defense firm, Ultra Electronics by Cobham, is expected to be challenged by the business minister, Kwasi Kwarteng, on the grounds of potential national security. For the records, the acquisition deal between Ultra and Cobham is valued at 2.6 billion pounds.

As per credible reports, Kwarteng has scheduled an order in the parliament preventing Ultra Electronics from disclosing crucial information to Cobham, fearing the risks to the national security. It was also mentioned that Ultra would be restrained from passing on details of the goods and services it offers to HM Government or HM Armed Forces.

Kwarteng, in a tweet, mentioned that the United Kingdom is opened for businesses, however, the foreign investment should not threaten the national security and safety.

Commenting on the strategic move, assistant General Secretary of the trade union Unite, Steve Turner quoted that the UK government’s action with regards to the sale of Ultra Electronics stands out to be a significant step in the right direction.

Turner further cited that since this forms an issue of national security, it has been believed that the government has finally woken up to the threat to the country’s sovereign defense capability, as well as to jobs and skills, induced by venture capitalists.

It is to be duly noted that the government has rights to intervene in takeovers for limited reasons, including economic stability, media plurality, and UK’s ability to fight national security and pandemics.

It was also revealed in an official notice that the Department of Business, Energy, and Industrial Strategy announced the deal to be investigated by Competition and Markets Authority (CMA) on national security grounds.

For the uninitiated, Ultra Electronics is integral to the operations of the UK armed forces, specializing in hi-tech systems that offer a merit in the air, at sea, and on land, through the detection of the emerging threats.

Source Credit: https://www.theguardian.com/business/2021/aug/18/kwasi-kwarteng-intervenes-in-takeover-bid-of-uk-defence-firm-ultra-electronics

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.