LONDON (CU)_The government of the United Kingdom is attracting widespread criticism from the opposition over its failure to protect British businesses from overseas takeovers, amid the sale of two major defence firms to US-backed buyers. On Monday (16 August), London-based defence firm Ultra Electronics announced that it has agreed to a £2.6bn takeover with US-owned Cobham Group, at a share price which is more than 40 per cent higher than the company’s all-time record.
With the aim of securing the blessing of the UK government, Cobham offered several binding commitments in relation to the takeover, including protection of sovereign defence capabilities, investment in the UK, safeguarding manufacturing jobs and funding of the company’s pension scheme. However, the aerospace manufacturing company acknowledged that it may sell some of Ultra’s business units, such as the energy and forensics units, which may impact a “limited number” of jobs.
Meanwhile, London-listed defence firm Meggitt also appears to be on the verge of a £6.3bn sale to US buyer Parker-Hannifin. The company, which was founded in in Halifax, UK, is known to have produced parts used in the Spitfire and Hurricane fighter aircrafts, which played a decisive role in the Battle of Britain. Although Meggitt has agreed in principle to a deal with Parker-Hannifin, at a premium of 71 per cent to its pre-bid price, rival American suitor TransDigm has been given until 14 September to offer a more attractive deal.
Accordingly, the government claims that…
