(Adds Advent declining to comment, background)
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
, has received bids from American companies
Parker-Hannifin and TransDigm.
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.
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)
