Britain to investigate $5 billion purchase of Cobham

Britain will investigate national security impacts of the purchase of defense company Cobham by U.S. private equity firm Advent International, which would potentially delay or block the $5 billion deal.

Business minister Andrea Leadsom’s move on Wednesday is not unusual where there are potential security concerns and follows British government intervention in the pending acquisition of satellite group Inmarsat, by an international private equity consortium which includes U.S. firm Warburg Pincus.

Leadsom had issued a European intervention notice, calling for a report from the Competition and Markets Authority (CMA) by the end of October to determine whether Cobham, the maker of air-to-air refueling equipment, should be sold.

The CMA could decide to undertake a lengthy inquiry due to Cobham’s role in supporting aircraft such as the F-35 Joint Strike Fighter and Eurofighter Typhoon as well as advanced naval vessels, satellites and military vehicles.

Other deals investigated on national security grounds have often been cleared after undertakings from the buyer.

“The CMA will now prepare a report on the national security aspects of the proposed transaction,” the business department said. “This is a statutory process to ensure national security implications of a proposed sale are fully assessed.”