Opening Quote: Government throws £4bn sale of Cobham into doubt
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The British government can be forgiven for having other things on its mind right now — and for not wanting to kick up a fuss unless it has to. But after shareholders overwhelmingly approved the sale of aerospace and defence group Cobham to US private equity group Advent earlier this week, the government has finally got around to weighing in on the deal.
Andrea Leadsom, the business secretary, has intervened on national security grounds, it was confirmed this Wednesday morning. The Competition and Markets Authority must now complete an investigation and report back by October 29 (one might think another pretty busy period for the government, coming as it does just two days before Boris Johnson’s “do-or-die” Brexit date). The government took similar action on Inmarsat’s sale to private equity earlier this year.
Earlier this week, a Cobham spokesperson suggested value for money was more important in UK Ministry of Defence procurement decisions than the nationality of the supplier. That may underestimate the sway (Lords and) Ladies can have over British corporate life. Lady Cobham, widow of the son of Cobham’s founder, has been pushing for Ms Leadsom to intervene for more than a month, convinced that it undervalues the recovery under way at the defence group and is against the national interest.
The deal may still go ahead. But this will not be a quick swoop for Advent.