U.K. Clears Cobham to Complete Ultra Acquisition – Defense Security Monitor

U.K. Clears Cobham to Complete Ultra Acquisition – Defense Security Monitor

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The U.K. Business Secretary has officially cleared the acquisition of Ultra by Cobham to proceed.

The GBP2.57 billion ($3.06 billion) deal was first announced in August 2021 . The deal faced heavy scrutiny in the U.K., as criticism was rising over U.S. takeovers of U.K. defense contractors.  Cobham itself was acquired by U.S.-based equity firm Advent International in 2019 for GBP4 billion ($5 billion). The Cobham/Ultra deal followed shortly after another U.K. company, Meggitt, agreed to be acquired by U.S. firm Parker Hannifin, with a subsequent second bid being offered by TransDigm.

This acquisition of mid-tier manufacturers in the U.K. by US firms had been causing consternation in the U.K. government and with labor unions. Some in government fear that these international takeovers will compromise national security and economic interests.

In order to assuage such fears, Cobham offered commitments to protect defense capabilities, and to fund  Ultra’s pensions and investment in the U.K.  However, it reserved the right to consolidate operations, likely through the divestiture of Ultra’s forensics and energy businesses.

Ultra is a Tier 3 (subsystem) and occasionally a Tier 2 systems provider in the maritime, C4ISR/EW, military and commercial aerospace, nuclear, and industrial sensors markets.  Headquartered in London, Ultra employs 4,500 primarily in the U.S. and U.K.

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