The Government is set to approve the £4 billion takeover of the UK defence firm Cobham by Advent following agreements over national security concerns.
The deal had been referred to the Competition and Markets Authority (CMA), with the agreement initially announced on 25 July 2019.
The Government intervened on 17 September 2019 after the Ministry of Defence (MoD) raised concerns about the takeover, specifically that military information that is stored on Cobham’s systems could be exposed, as well as issues over what would happen if Advent decided to exit sections of the business.
Andrea Leadsom, Business Secretary, said: “I have now reviewed further national security advice from the MoD and met with both Cobham and Advent who have offered legally binding undertakings designed to mitigate national security concerns, which I am minded to accept.”
As a part of the agreement, Advent will have to give the MoD notice if it plans to sell any part of Cobham, while it will also be prevented from withdrawing vital military services for five years, in addition to ensuring that British nationals are in charge of key defence services.
Cobham is renowned for its aerospace technology, while its tech is currently used in advanced aircraft, naval vessels, military vehicles and satellites.
Advent stated that it has worked closely with the MoD to “construct undertakings that would adequately mitigate against any potential national security risks” while welcoming the decision to accept those undertakings, subject to consultation.
Nigel Fry, General Practice Partner at Milsted Langdon, said: “This deal is another example of an international firm taking advantage of the exchange rate and investing in an attractive UK business. With security concerns addressed, the deal can now be completed following a protracted period of investigation.
“For advice on matters relating to mergers and acquisitions, contact our expert team today.”