Government intervenes in £4 billion takeover of UK defence business by US private equity firm
Secretary of State for Business, Energy and Industrial Strategy Andrea Leadsom has issued a government intervention into the sale of UK defence company Cobham on the grounds of national security.
Cobham announced the £4 billion takeover deal by a subsidiary of US private equity firm Advent International on 25 July 2019. The Secretary of State issued a European intervention notice yesterday (September 17), acting on official advice, issuing the intervention into the proposed sale on national security grounds.
The Secretary of State has the power to intervene in mergers on public interest grounds relating to national security under the Enterprise Act 2002.
CMA to report by October 29
The minister has written to the Competition and Markets Authority (CMA) to inform them of her decision to intervene and has instructed them to investigate.
The CMA will now prepare a report on the national security aspects of the proposed transaction. The statutory process will ensure these implications are fully assessed. The CMA has until midnight October 29, 2019 to submit the report to the Secretary of State.
Business Secretary Andrea Leadsom said: “Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security. As part of the statutory process, the Competition and Markets Authority will now investigate and carry out a review on the national security implications of the transaction. They must report back to me by October 29 2019. The government’s goals are to support private sector innovation whilst safeguarding the public interest.”