Fury as Kwasi backs £2.6bn Ultra sellout
As US buyout barons give security guarantees...
ONE of Britain’s leading defence companies moved a step closer to foreign ownership last night after the Government lent its support to the controversial £2.6bn takeover.
Ultra electronics – which makes submarine- hunting sonobuoys – is being snapped up by US private equity predators Advent International.
It follows the £4bn takeover of Cobham by Advent in 2020 that led to the break-up of the historic British defence group.
Advent is now buying Ultra through what is left of Cobham.
And despite Cobham’s fate, and the strategic importance of Ultra to Britain, Business Secretary Kwasi Kwarteng said he was ‘minded to accept’ the deal.
Whitehall officials have confirmed parties involved in the deal have offered undertakings to protect national security.
They include the creation of two companies to cover Ultra’s most sensitive work in the UK, which will have a state-endorsed board director on each.
It has also been confirmed
‘We have let so much go’
that ministers will have ‘strong step-in rights’ similar to a ‘special share’, allowing the Government to secure the future transfer of ownership.
And they will be granted powers to access Ultra’s intellectual property.
Cobham chairman Shonnel Malani said: ‘We have always been clear about our unwavering commitment to ensuring that the UK’s national security is protected and believe these very extensive and robust undertakings will do just that.’
But the decision sparked a backlash from senior MPs amid fears of the hollowing out of UK’s defence sector.
Former Tory leader Sir Iain Duncan Smith said he does ‘ not understand why they are not blocking it’.
he told the Mail: ‘ how do we build capability, when we keep on allowing it to go somewhere else?
‘In terms of defence and technology, these are things we need to have here. And we used to. But in the last two decades, we have let so much go, and it’s time we resolve that.’
Tory MP Bob Seely, who is a member of the influential foreign affairs select committee, said: ‘There is a balance to be struck between being an attractive and open economy on one hand, and protecting intellectual property, our industrial base and sensitive defence firms on the other.
‘I am not sure we have that balance quite right yet.’
At the weekend, Lady Cobham, the daughter-in-law of Cobham founder Sir Alan Cobham, warned in the Mail on Sunday about the UK ‘auctioning off’ its high-tech firms such as Ultra, Inmarsat and Meggitt. She said ‘no one should be taken in’ by the fact that Cobham is fronting the takeover – as the ultimate owner is a private equity firm. Tory grandee Lord heseltine, who has previously criticised Kwarteng for abandoning Britain’s industrial strategy, said the stringent undertakings showed ‘a glimmer of sanity’ at long last.