Security fear over satellite deal triggers investigation

A CONTROVERSIAL £2.6bn bid to take British satellite firm Inmarsat private will be investigated by the Government.

The deal would see private equity investors, including US-based Warburg Pincus, UK-based Apax and two Canadian pension funds, buy the firm and remove it from the London Stock Exchange.

Inmarsat was founded in 1979 and operates 13 satellites. Half its business comes the marine industries, with it providing tracking and communication services to ships and planes.

But the takeover has now been referred by the Competition and Markets Authority (CMA) to Jeremy Wright, the Culture Secretary, on public interest grounds. It is thought this is because of Inmarsat’s work for the UK and US militaries, as well as other potentially sensitive customers.

The CMA has a duty to refer takeovers to ministers if it is concerned they could affect the country’s security, with satellites classed as important to national infrastructure. The regulator is taking public comments on the deal until July 29 and is due to decide whether it will recommend a deeper investigation by September 10.

It comes as the watchdog takes a more muscular approach to major tie-ups.

The CMA is investigating an investment by Amazon into fast-food delivery firm Deliveroo, and in April it blocked a £14bn tie-up between Sainsbury’s and Asda. It is understood the referral of the Inmarsat deal came after the consortium buying the company voluntarily sent details to the CMA.

An insider claimed the watchdog’s probe was not expected to present any major security concerns. One person with knowledge of the deal said: ‘It’s about as close as you can get to keeping Inmarsat in the family.’

Critics warn a sale would be another example of Britain allowing a successful technology companies to be snapped up by foreign rivals.

Inmarsat declined to comment last night.