Fears mount over fate of Cobham
Is Government set to give green light to £4 billion takeover by US predators?
‘Devastating’: Lady Cobham FEARS are growing that ministers are planning to wave through the controversial £4bn takeover of Cobham.
MPs, analysts and the Cobham family are worried the deal will go ahead without adequate scrutiny of the knock-on effect it could have on Britain’s defence industry and national security.
American private equity group Advent International has offered to buy the 85-year-old defence group in a 165p-per-share takeover that has been backed by Cobham’s board. But opposition has been growing since the buyout was announced in July.
Among those speaking out are the founding Cobham family and MPs who have argued ‘one of the jewels in the crown of the UK’s industrial base is being sold on the cheap’.
Business Secretary Andrea Leadsom has met Cobham and Advent to ‘listen to and understand their plans’. The business department is in talks with Advent about ‘potential legally binding undertakings specifically on the economic implications of the proposed merger’.
This is likely to include commitments on jobs and the amount of money Boston-headquartered Advent will plough into research and development at Cobham.
But critics argue it does not go far enough, saying it disregards concerns that selling Cobham will erode Britain’s defence industry and put our national security at risk. The Government only has the power to intervene in mergers on public interest grounds if they will pose a problem to national security, media plurality and financial stability.
But an industry source told the Mail that the ‘national security angle is not one that there is a big worry about within Government’ with regards to the Cobham deal.
‘The biggest concern with these things is jobs and where the manufacturing is going to be situated,’ the source added. Lady Cobham, the widow of former chief executive and chairman Sir Michael Cobham, son of founder Sir Alan Cobham, has said her late husband would be horrified by the deal. She said: ‘It is devastating news that the Government looks set to completely disregard the threat this deal poses to UK national security.’ Soon after the deal was announced, the 76-year-old wrote to the Defence Secretary Ben Wallace and Leadsom urging the Government to intervene.
She added: ‘I haven’t received any response from Andrea Leadsom after sending her a letter outlining my concerns – indeed I wonder if she’s read it.’
Cobham chief executive David Lockwood has dismissed concerns around the deal as ‘noise’ the company is ignoring. A Cobham spokesman said: ‘Cobham has provided the Government with all the information required to date in assessing this transaction.’
An Advent spokesman said: ‘We are actively working with the business department and the MoD to ensure that the acquisition of Cobham reflects our responsible ownership principles.’