US-Owned Firm’s $3.5 Bln Takeover Bid for UK Defence Manufacturer ‘Shocks’ Ex-Head of Royal Navy
09:25 GMT 24.07.2021 (Updated: 13:21 GMT 06.08.2022)
© AFP 2022 / ROYAL NAVY / CROWN COPYRIGHTThis handout image provided by the official Twitter account of Commodore Steve Moorhouse, Royal Navy, Commander of the UK Carrier Strike Group on July 6, 2021 shows a view of the vessels of the strike group sailing behind the Royal Navy's HMS Queen Elizabeth aircraft carrier through Egypt's Suez Canal.
Ultra Electronics manufactures key defence equipment for the UK Armed Forces as it remains world leader in making sophisticated submarine-detecting sonars.
The British government has said it is “closely monitoring” the proposed £2.58 billion ($3.55 billion) takeover of the engineering group Ultra Electronics by a rival company.
The statement came a day after Ultra said that its board was “minded to recommend” a £35($48)-a-share offer from the British aerospace manufacturing company Cobham Limited, owned by Advent International, the American private equity firm.
The developments are almost certain to alarm the UK Ministry of Defence, given the fact Ultra Electronics provides the Royal Navy with state-of-the-art submarine-hunting sonobuoys and sonar equipment capable of detecting torpedoes for military patrol aircraft and warships.
© AP Photo / Efrem LukatskyA view of the Britain's Royal Navy patrol ship OPV "Trent" in the Black Sea, Wednesday, July 7, 2021 during Sea Breeze 2021 maneuvers
A view of the Britain's Royal Navy patrol ship OPV "Trent" in the Black Sea, Wednesday, July 7, 2021 during Sea Breeze 2021 maneuvers
© AP Photo / Efrem Lukatsky
The company is also as a supplier to key UK military programmes pertaining to the F-35 and the Typhoon fighter jets.
Former senior British military chiefs have also voiced concern over a $3.5 billion bid for Ultra Electronics, referring to potential national security risks and damage to the UK’s manufacturing base.
“This shocks me - the government is essentially giving up on the UK having sovereign capability in areas that are important to the security of the nation. Ultra makes some really important stuff, technology at the cutting edge that allows us to beat our opponents”, Admiral Lord West, the ex-head of the Royal Navy, was cited by The Telegraph as saying.
He then spoke of “extremely troubling” situation that the government “talks about us having sovereign capability - whether it’s defence or areas such as the ability to make medicines in times of emergency - but yet again it looks like ownership that will go to the Americans”.
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The view was shared by General Sir Lord Dannatt, former head of the Army, who argued that “there is a domestic jobs aspect and what it [the potential deal] means for the nation’s industry”. According to Dannatt, London “seems to have walked away from having an industrial strategy”.
The two were echoed by UK lawmakers from the Defence select committee, with Labour MP Kevan Jones urging Cabinet ministers to “step in as a matter of urgency”.
“The Ministry of Defence needs to focus on vital UK businesses needed for sovereign defence being sold. The UK industrial and technology base is being hollowed out by foreign takeovers and there seems no sense of urgency about tackling that”, Jones emphasised.