FILE PHOTO: Britain’s Business Secretary Andrea Leadsom is seen outside Downing Street in London, Britain November 5, 2019. REUTERS/Yara Nardi
LONDON (Reuters) – Britain has approved Advent International’s $5 billion purchase of defense company Cobham (COB.L) after the U.S. private equity group made commitments to address national security concerns.
Business minister Andrea Leadsom had put the deal on hold to review the sale of air-to-air refueling equipment maker Cobham, which employs 10,000 people and also makes communications equipment for military vehicles.
“I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed”, Leadsom said in a statement bit.ly/2PIzbkS published on Friday.
Leadsom had said on Tuesday that the new British government of Prime Minister Boris Johnson was minded to accept the deal after Advent put forward several legal undertakings, including having a number of British executives on Cobham’s boards.
Advent will have to give prior notice to Britain’s defense ministry if it plans to sell all or part of Cobham’s business, and honor existing contracts with the government.
Founded in the 1930s, Cobham’s equipment came to the fore ahead of World War Two and in the 1982 Falklands conflict. Its technology is now used in aircraft such as the F-35 Joint Strike Fighter and Eurofighter Typhoon as well as advanced naval vessels, satellites and military vehicles.
However, it is still recovering from profit warnings in 2016 and 2017 that forced it to ask shareholders for cash and prompted Chief Executive David Lockwood to overhaul operations.
Advent bought British electronics company Laird for $1.65 billion last year.
The private equity firm has already won approval from regulators in the European Union, U.S. and Finland for its acquisition of Cobham, whose acquisition was backed by shareholders in September.
Reporting by Kanishka Singh in Bengaluru; Editing by Simon Cameron-Moore and Alexander Smith