UK to probe U.S. private equity purchase of defence firm Ultra
LONDON, Aug 18 (Reuters) - Britain said it will investigate possible national security risks from the planned 2.6 billion-pound ($3.6 billion) acquisition of defence firm Ultra Electronics by rival Cobham, which is owned by U.S. private equity firm Advent.
Customers of Ultra, which sells torpedo and radar systems and a range of defence communication equipment, include the British and U.S. governments.
Cobham set out commitments to address concerns over potential national security implications of its takeover of Ultra when it announced an agreement for the acquisition on Monday.
"The UK is open for business, however foreign investment must not threaten our national security," business minister Kwasi Kwarteng said on Wednesday.
He said he had asked Britain's Competition and Markets Authority, a regulator, to prepare a report on the proposed transaction.
The government said the deadline for the report was Jan. 18, 2022.
Kwarteng said he would seek to stop Ultra from disclosing sensitive information to Cobham about the goods or services it provides to Britain's government and its armed forces.
Advent declined to comment and instead referred to Cobham's statement on Monday which included the offer of legally binding commitments on Ultra including safeguarding national security, maintaining a headquarters in Britain and investing more in the country.
Britain's government said in July it was closely monitoring Cobham's bid for Ultra.
Another British aerospace and defence group, Meggitt MGGT.L , has received bids from American companies Parker-Hannifin PH.N and TransDigm TDG.N .
Private equity firms have been on a buying spree in Britain, including a $9.5 billion bid underway by Fortress Investment Group for British grocery chain Morrisons MRW.L .
Buyout groups spent $45 billion on companies in Britain in the first half of 2021, according to Refinitiv data, more than double the next highest amount for any January-June period. ($1 = 0.7274 pounds)
Reporting by William James in LONDON and Chibuike Oguh in NEW YORK; writing by William Schomberg; editing by Elaine Hardcastle, Philippa Fletcher and Hugh Lawson
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