UK blocks Chinese aerospace sale after security probe
UK private equity firm Better Capital PCC Ltd’s ( Better Capital) sale of airplane parts firm Northern Aerospace Ltd ( NAL) to a Chinese buyer has fallen through after regulators did not issue approval following a probe into national security concerns.
The UK Competition and Markets Authority (CMA) launched an investigation last month into the 44 million pound sale of the company to a unit of China’s Shaanxi Ligeance Mineral Resources Co, issuing a notice halting the disposal.
That followed a formal intervention by the British Secretary of State for Business, Energy and Industrial Strategy under rules allowing it to take action on national security grounds.
Better Capital said NAL had clearly demonstrated that there were no competition issues in the deal and that all matters raised by the Ministry of Defence had been satisfactorily dealt with.
“NAL and ( Better Capital-unit) the GP have been advised that there are national security issues but neither has any knowledge of their nature and both remain ignorant as to how the disposal of NAL could give rise to any transaction-specific concern,” the company said.
A string of acquisitions by Chinese companies across the world has fuelled security concerns in countries including Germany, the US and Canada, leading to some high- profile blocks on deals.
Britain laid out proposals last year to have more say over deals in its military and technology sectors, as the government tries to prevent homegrown companies in sensitive industries from falling into foreign hands, marking a shift for a country which has traditionally been one of the most open to foreign buyout deals.
Better Capital had agreed last month to sell NAL to Gardner Aerospace Holdings Ltd, owned by the Chinese company, for 44 million pounds ( US$ 58.25 million).
Under the ministry intervention, the CMA had until July 13 to submit a report on the competition and national security aspects of the proposed deal. — Reuters