British Prime Minister Theresa May postpones vote on Brexit deal
UK may block $ 5 billion deal
The UK intends to investigate the impact on national security of the purchase of the defense company Cobham by the American private equity firm Adventure International. As part of this process, a delay or even blocking of a $ 5 billion deal is not excluded..
Business Minister Andrea Leedsom noted that such measures are quite common when there is a potential security threat. She called for a report from the competition and markets authority (CMA) by October 29 to determine if Cobham should be sold..
The government may decide the deal needs full investigation due to the company's role in supporting combat aircraft such as the F-35 Joint Strike Fighter and Eurofighter Typhoon, as well as advanced naval vessels, satellites and military hardware..
Other transactions, investigated for reasons of national security, were often terminated after receiving a commitment from the buyer.
«The CMA will now prepare a report on the national security aspects of the proposed deal. This is a legislative process to ensure that the national security implications of the sale are fully assessed», – said in a message from the business department.
UK being one of the world's most open economies, has sold several innovative firms to foreign buyers in recent years, including a semiconductor design company to Japan's Softbank and Comcast's Sky TV group.
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Today at Cobham, founded in the 1930s by a British explorer, employs 10,000 people.
Russ Mold, chief investment officer of the AJ Bell platform, said investors may be disappointed with the timing of the intervention, coming two days after Cobham shareholders approved the deal..
Adventure International already has experience in acquiring UK technology. Last year, the company bought electronics firm Laird for $ 1.65 billion..
Certain Cobham operations have special security treaty status, allowing them to bid on U.S. defense contracts..
Cobham CEO David Lockwood said he has already had some discussions with the government about the takeover, but will not go into details..
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