Government intervenes in Cobham takeover over national security concerns
The government has intervened in a US firm’s takeover of defence and aerospace company Cobham, citing national security concerns.
The takeover of Cobham by Advent International has been postponed pending an intervention notice, with the government citing national security concerns. The Competition and Markets Authority (CMA) will investigate the takeover and the government will have the power to prevent the deal if it has sufficient reason to doubt the integrity of the transaction.
Cobham is a firm based in Dorset specialising in technology that improves mid-air refuelling of aircraft. The company has numerous contracts with the MOD and concerns have been raised over the possible breaking up and selling off of these contracts.
Andrea Leadsom, Business Secretary, said: “Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security.”
“As part of the statutory process, the Competition and Markets Authority will now investigate and carry out a review on the national security implications of the transaction. They must report back to me by 29 October 2019.”
“The government’s goals are to support private sector innovation whilst safeguarding the public interest.”
Advent International has committed to maintaining the US and UK Cobham Headquarters. They have said they will cooperate with the UK government during the review.
Under the Enterprise Act 2002, the Secretary of State for Business, Energy and Industrial Strategy has the power to intervene in mergers on public interest grounds relating to national security. This responsibility is discharged in a quasi-judicial capacity, which means that the Secretary of State must act, and be seen to act, in a scrupulously fair and impartial manner.
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