Amidst the growing criticism of the United Kingdom government to allow the take acquisition of UK based defence and aerospace company Cobham by a private equity firm of the United States at the dead of the night in a deal worth £4bn, the new US based owner of the British company has pledged that it will keep all the jobs and investment in Britain.
The US based private equity firm Advent International, the possible new owner of Cobham, a global leader in air-to-air refuelling expertise, has promised that it will continue to retain its headquarters of Cobham in the UK as well as ensure continued funding of research and development at its Dorset offices, said Cobham. The promise that the name of the company, which references Sir Alan Cobham who founded the firm in 1934, would also remained unchanged.
The proposed deal had not matured for months because of rising concerns that the national security of Britain could be at risk because of the acquisition of Cobham by Advent International since the British company possessed contracts with the British military – many of which were sensitive in nature. Cobham has extensive deals with the British military. Electronic warfare and communications systems for military vehicles are also manufactured by the company.
The shareholders of Cobham approved of the acquisition offer from Advent in August. However the deal was stalled temporarily in September after the intervention of the UK government in the deal because of national security concerns.
The deal was approved on Friday by UK’s business secretary, Andrea Leadsom. The founding family of the UK firm criticized the government’s decision saying that it was being “timed to avoid scrutiny”
The number of UK employees post the acquisition would be maintained at 90% of the current level for five years, Advent pledged on Monday. Cobham employs about 1,700 UK staff of a worldwide headcount of 10,000.
Cobham’s communications and connectivity business in the UK would also not be dismantled or sold out, Advent also said. Missions systems unit on air-to-air refuelling technology is included in that business.
Advent also pledged to continue spending on UK-based research, committing to invest at least 4.4% of revenue from its UK communications division.
“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,” said Shonnel Malani, a partner at Advent.
“This is a deeply disappointing announcement and one cynically timed to avoid scrutiny on the weekend before Christmas. In one of its first major economic decisions, the government is not taking back control so much as handing it away. In Cobham we stand to lose yet another great British defence manufacturer to foreign ownership, through a takeover that would never have been approved by the Americans, French or Japanese, all of whom have taken steps recently to raise protections for their own defence sectors,” said Lady Nadine Cobham, the daughter-in-law of the company’s founder.
(Adapted from TheGuardian.com)