Yahoo Finance Cobham buyer vows to keep UK jobs and HQs after controversial takeover
The new owners of defence giant Cobham have vowed to safeguard jobs and operations in the UK after the British government approved a controversial £4bn takeover.
Cobham’s share price (COB.L) rose 0.4% on Monday after the government confirmed it had approved the UK firm’s takeover by a US private equity firm on Friday night.
The British air-to-air refuelling company and its buyer Bidco, part of Advent International, promised to keep its headquarters in Britain for several different arms of the business.
The parties also promised in a statement released on Monday to preserve its name and spend at least 4.4% of sales at two UK arms of the firm on research and development.
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The legally binding commitments helped ensure the UK government approved the deal, after it was put on hold to review concerns over national security.
Business minister Andrea Leadsom was accused of trying to limit scrutiny of the decision after her department confirmed it in a press release late on Friday night.
A further commitment was made to keep work on UK government contracts within the country, unless given written approval by the Home Office or Ministry of Defence.
The boards of both companies had agreed to the deal in July. Cobham was founded by the aviation pioneer Sir Alan Cobham in 1934, and now has 11,500 employees worldwide.
But Nadine Cobham, daughter-in-law of the founder, told Reuters: "In Cobham, we stand to lose yet another great British defence manufacturer to foreign ownership.
"In one of its first major economic decisions, the government is not taking back control so much as handing it away.”
Leadsom had said on Friday: “While trade and investment play an important part in the UK economy, when intervening in mergers on national security grounds, I will not hesitate to use my powers to protect national security, if it is appropriate to do so.
But she added: “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.”
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The prime minister Boris Johnson also told reporters on Friday: “It's very important that we should have an open and dynamic market economy.
“A lot of checks have been gone through to make sure that, in that particular case, all the security issues that might be raised can be satisfied."
Shonnel Malani, a partner at Advent, said: "Advent takes its custodianship of Cobham seriously, and we are confident the transaction and undertakings being given on national security, jobs and future investment, provide important long-term assurances for both Cobham's employees and customers, particularly in the UK and also globally."
