Ultra Electronics agrees £2.6bn takeover by rival defence firm Cobham | Mergers and acquisitions

A British arms manufacturer that has supported coalition forces in Afghanistan has agreed to be acquired by rival, private equity-backed aerospace company Cobham.

The boards of directors of Ultra Electronics and Cobham announced Monday that they had struck a deal at £ 35 per share, more than 40% above Ultra’s record price.

Dorset-based Cobham, which has been owned by US investment firm Advent since a £ 4 billion deal in 2020, said the combined company will play a “mission-critical” role in defense and security for the ” Five Eyes Network of Intelligence Allies – UK – Play, USA, Australia, Canada and New Zealand.

She has made binding commitments to the UK government to secure her blessings on the deal, including protecting the state’s defense capabilities, funding the pension system and investing in the UK.

The deal is said to be part of a UK aerospace sell-off valued at nearly $ 10 billion for more than $ 7 billion.

Ultra Electronics specializes in high-tech systems that give armed forces an advantage in the air, on land and at sea by detecting emerging threats.

This included systems to help track improvised explosive devices and intercept communications in Afghanistan, where 20 years of intervention by powers like Britain and the US crumble as the Taliban regain control.

Simon Pryce, CEO of Ultra, said the offer of “2.6 billion.

Cobham’s quest for ultra electronics was aided by the presence of former defense officials from the US and UK governments.

“As a former US Secretary of Defense, I have seen firsthand the importance of maintaining close military ties between the UK and the US,” said Cobhams non-executive director Mark Esper.

“I am also aware of the evolving threats facing our two nations and our allies. It is therefore vital that we have defense companies capable of meeting our common security needs. The improved capabilities of a combination of Cobham and Ultra promise significant benefits for both countries. “

The UK government may block takeovers for a number of reasons, including a national security risk, and has previously announced that it will be closely monitoring the proposed deal.

However, Cobham has come up with a long list of commitments that he hopes will ensure government approval.

These include “ensuring and supporting UK national security, including adequate safeguards for UK sovereign capabilities, continuity of care and UK critical capabilities, as well as appropriate board composition and national security clearance arrangements”.

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It will also commit to safeguarding jobs and apprenticeships in UK manufacturing and engineering, creating new ones and maintaining Ultra’s London headquarters.

Other promises include investing in UK research and development and funding Cobham’s retirement plan.

The company said compliance with these promises will be monitored through a “forum” with government officials.

The acquisition adds to a buying frenzy that saw U.S. private equity firms buying or bidding on a number of UK companies, including Asda and Morrisons supermarkets, breakdown assistance company AA, infrastructure firm John Laing, and insurer LV =, among others .

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