14:26 GMT +322 September 2018
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    UK Forbids Chinese Firm From Purchasing British Arms Manufacturer

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    The ruling was made amid growing concerns of sensitive information and trade secrets falling into the hands of the Chinese government.

    The Competition and Markets Authority (CMA) has prohibited British private equity firm Better Capital from selling a defense company in its portfolio to a Chinese bidder, City A.M. reported on Monday.

    A subsidiary of Shaanxi Ligeance Mineral Resources had been negotiating with Better Capital in hope of purchasing Northern Aerospace – a supplier of aerospace products to defense giant Boeing, in addition to some non-defense clients – but months of negotiations ended in disappointment after the CMA blocked the deal.

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    "Permission to complete the sale was not obtained from the Competition and Markets Authority by the revised contractual deadline, despite requests for such permission by both parties. Accordingly the proposed transaction has lapsed,” the private equity firm said today, in a statement.

    The prospect of confidential information falling into Beijing’s hands as a result of the takeover postponed and ultimately prevented the £44 million (almost $59 at the current GBP/USD exchange rate) deal from going through.

    "On Sunday 17 June 2018, the secretary of state [Greg Clark] issued a public interest intervention notice, confirming that he is intervening in the sale [delaying it] on national security grounds,” the Department for Business, Energy and Industrial Strategy said in a statement last month.

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    Minister Clark delayed the deal at the request of UK Defense Minister Gavin Williamson.

    The CMA has the power to block mergers and acquisitions if it believes the deal will significantly reduce intra-market competition or will give rise to anti-competitive behavior, at the expense of consumers.

    Headquartered in the town of Consett, Northern Aerospace has six production facilities in the UK and Poland, employing some 600 people. The company designs and manufactures a range of aerospace products and it’s unclear if Better Capital will seek another buyer for its major defense holding.

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    Tags:
    aerospace, defense, trade, Competition and Markets Authority (CMA), Northern Aerospace, UK Government, Gavin Williamson, China, Poland, United Kingdom
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