Cobham a US-owned firm is trying to buy Ultra Electronics which produces vital technology for the RAF. They are offering £2.5 billion. That’s £35 a share, more than 40% higher than the company’s all-time record share price. Dorset-based Cobham, was itself bought by the US private equity firm Advent in a £4bn deal in 2020.Why should we care about this? We should care because ‘Taking Back Control’ doesn’t mean much if key parts of our industry are controlled by foreigners. Foreign ownership of British companies will mean that research departments and production jobs will increasingly relocate overseas. And any assurances or promises are given by these overseas bidders are far from guaranteed.
Since Advent took over Cobham, large parts of the company have been sold off, including its Aero Connectivity arm (bought for $965 million by American rival TransDigm) and Mission Systems, bought for $2.83 billion by Eaton Corporation, which operates out of Ohio.Labour’s shadow business minister, Chi Onwurah, said ministers “should be doing far more than making weak and vague noises to protect [companies such as Ultra].
”Serious questions remain about potential threats to national security, the business model of the new owners, and future governance and operational freedoms,” she said.“The Conservatives have repeatedly failed to protect British businesses from takeovers that might compromise our national security and economic interests. Labour would introduce a robust takeover regime to support and grow our world-class industries.”
Unions too are voicing their concerns. Unite the Union has called for an end to “meaningless government statements” and to act “…to protect UK strategic assets, protecting jobs, skills and our national security.” Last year the Commons defence committee published a submission from Unite on “sovereign capability” calling on the government to generate a list of technologies that need to be secured to give Britain freedom of action without the intervention of other countries.
Patrick Harrington, General Secretary of Solidarity commented: “I welcome the lead taken by Unite in speaking out in the national interest. We cannot be reliant on the whims and policies of foreign governments and companies. We must aim for economic and technology sovereignty and not just think about political sovereignty if we are truly to take back control. I welcome the announcement by the business secretary, Kwasi Kwarteng of an inquiry into the proposed takeover of Ultra Electronics by Advent. I hope that the takeover will be blocked. It’s just a tragedy that action was not taken earlier as we have already lost key industrial companies.”
Picture: Ultra Electronics Business in the Knave’s Beech Business Park at LoudwaterJonathan Billinger/ Ultra Electronics https://upload.wikimedia.org/wikipedia/commons/7/7a/Ultra_Electronics_-_geograph.org.uk_-_754776.jpg