(Adds comment by PM Johnson, member of Cobham family)
LONDON, Dec 21 (Reuters) - Britain has approved the purchase
of British defence company Cobham by U.S. investor
Advent International for $5 billion after the private equity
group made commitments to address national security concerns.
Business minister Andrea Leadsom had put the deal on hold to
review the sale of air-to-air refuelling equipment maker Cobham,
which employs 10,000 people and also makes communications
equipment for military vehicles.
"I am satisfied that the undertakings mitigate the national
security risks identified to an acceptable level and have
therefore accepted them and cleared the merger to proceed,"
Leadsom said in a statement http://bit.ly/2PIzbkS published on
Friday.
Leadsom had said on Tuesday that Prime Minister Boris
Johnson's new government of was minded to accept the deal after
Advent put forward several legal undertakings, including having
a number of British executives on Cobham's boards.
Advent will have to give prior notice to Britain's defence
ministry if it plans to sell all or part of Cobham's business,
and honour existing contracts with the government.
A member of the family which founded Cobham said the
decision was deeply disappointing.
"In Cobham, we stand to lose yet another great British
defence manufacturer to foreign ownership," said Nadine Cobham,
whose late husband was a son of the company's founder.
"In one of its first major economic decisions, the
government is not taking back control so much as handing it
away," she said, adding that the announcement on the weekend
before Christmas had been timed to avoid scrutiny.
Johnson said the sale showed Britain - which is due to leave
the European Union at the end of next month - was open to
investment from around the world.
"It's very important that we should have an open and dynamic
market economy," he told British broadcasters during a visit to
Estonia. "A lot of checks have been gone through to make sure
that, in that particular case, all the security issues that
might be raised can be satisfied."
Founded in the 1930s, Cobham's equipment came to the fore
ahead of World War Two and in the 1982 Falklands conflict. Its
technology is now used in aircraft such as Lockheed Martin's
F-35 Joint Strike Fighter and the Eurofighter Typhoon, as well
as advanced naval vessels, satellites and military vehicles.
However, it is still recovering from profit warnings in 2016
and 2017 that forced it to ask shareholders for cash and
prompted Chief Executive David Lockwood to overhaul operations.
Advent has already won approval from regulators in the
European Union, United States and Finland for its acquisition of
Cobham, which was backed by shareholders in
September.
The U.S. private equity group also bought British
electronics company Laird for $1.65 billion last year.
(Reporting by Kanishka Singh in Bengaluru and William Schomberg
in London; Editing by Simon Cameron-Moore, Alexander Smith and
David Clarke)
