UK to probe U.S. private equity purchase of defence firm Ultra

LONDON (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.

Britain’s government said in July it was closely monitoring the Cobham bid for Ultra.

Another British aerospace and defence group Meggitt has received bids from American companies Parker-Hannifin and TransDigm. ($1 = 0.7274 pounds)

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