Kwarteng backs £2.6billion takeover of Ultra Electronics
ULTRA Electronics will fall into US private equity hands after the Business Secretary backed a £2.6bn takeover.
It is being bought by Boston-based Advent International through its subsidiary Cobham – despite significant opposition from defence experts and MPs.
Kwasi Kwarteng was urged to block the deal amid fears of the hollowing out of the UK defence sector.
But he has set the stage for Ultra to be delisted from the London Stock Exchange and swallowed by Advent. His clearance came after Advent agreed legally binding undertakings to protect national security, including creating two firms to cover Ultra’s most sensitive work, with a state-endorsed board director on each. Ministers will have ‘strong step-in rights’, to secure any future change of owner.
It follows Advent’s £4bn takeover of Cobham in 2020, which led to the breakup of the defence group. Advent is buying Ultra through what is left of Cobham. Independent analyst Francis Tusa said Cobham is just Advent disguised as ‘a wolf in sheep’s clothing’. He raised fears political turmoil would enable Advent to renege on agreements.
Ultra makes submarine-hunting kit and is a world leader in sonar, radar and torpedo technology. Ex-Tory leader Sir Iain Duncan Smith said he ‘does not understand’ why the deal is going ahead.
■ THE Business Secretary has delayed his final decision on Newport Wafer Fab, the British semiconductor factory being bought by the Chinese.
Kwarteng was due to give his verdict this week on the takeover of Newport by Nexperia, a Dutch division of China’s Wingtech. But he now wants a further two months to analyse the controversial £63m deal.