Cobham clears hurdle in bid for Ultra Electronics

Ultra Electronics displayed its Orion X510 radio at the US Navy League's Sea-Air-Space Exposition in April 2022. The radio enables deployed forces to share data. (Janes/Marc Selinger)

UK Secretary of State for Business, Energy, and Industrial Strategy (BEIS) Kwasi Kwarteng is “minded to accept” the legally binding commitments that Cobham Group has offered to make, to address national security concerns about its proposed acquisition of Ultra Electronics, the UK government announced on 23 June.

Kwarteng will not make a final decision on Cobham's commitments, or “undertakings”, until a public comment period ends on 3 July, the government said. Although Cobham and Ultra are both based in the UK, Cobham is owned by a US private equity firm Advent International, which has faced criticism for divesting several Cobham businesses.

Cobham's proposed undertakings include creating two UK legal entities, or SecureCos, to encompass Ultra UK facilities that perform sensitive work for the UK government; placing a government representative on each SecureCo board of directors to oversee any disinvestment or divestment of sensitive capability; giving the government the right to approve the articles of association of each SecureCo; and enabling the government to transfer ownership of the SecureCos to itself or a third-party on national security grounds.

“We have always been clear about our unwavering commitment to ensuring that UK's national security is protected and believe these very extensive and robust undertakings will do just that,” Cobham chairman Shonnel Malani said.

Cobham has offered GBP2.6 billion (USD3.2 billion) for Ultra, saying that the combination would create a “global defence electronics champion”. The UK government has been scrutinising the proposed transaction since August 2021.