Cobham and Ultra Electronics were two of the leading independent UK defence electronics companies. US equity capital firm Advent International completed a $4 billion takeover of Cobham in January 2020.

On August 16 the management of Cobham and Ultra Electronics agreed terms for a $3.5 billion takeover of Ultra (see US-owned Cobham to buy Ultra Electronics for £2.57 billion), which would see both companies ultimately owned in the US.

UK business minister Kwasi Kwarteng has intervened under the Enterprise Act of 2002 on national security grounds. The CMA has until midnight January 18, 2022 to report its preliminary findings that will either wave the acquisition through or call for a deeper phase-two investigation.

Cobham has said it is willing to agree terms with the UK government around commitments to invest in Ultra’s UK work force by protecting existing and creating new UK manufacturing and engineering jobs and apprenticeships and maintaining a UK headquarters. It would also include a commitment to performing R&D in the UK and registering intellectual property rights in the UK.

The deal was expected to close in 1Q22 but it requires numerous regulatory approvals and a second-phase investigation in the UK could jeopardize the timetable.

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