UK Department of Business, Energy, and Industrial Strategy State Secretary Kwasi Kwarteng has accepted Cobham Ultra Acquisitions’ undertakings on the merger deal with Ultra Electronics.
The clearance to proceed with the acquisition was made based on advice from the Ministry of Defence and the consideration of responses to a consultation.
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The consultation process was launched by the UK Government last month to address issues concerning national security.
The concerns were raised over the proposed acquisition of UK defence company Ultra Electronics by Cobham that was acquired by US private equity firm Advent International.
The consultation process to evaluate the undertakings offered by the companies to address the concerns ended on 3 July 2022.
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After accepting the undertakings, the State Secretary made a few changes to include responses to a consultation on the new agreement.
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By GlobalDataThe undertakings to allay the fears regarding national security have now come into force.
The undertakings will see the creation of two new ‘SecureCos’, which are legal entities that include the UK Ultra facilities that deliver sensitive capabilities to the government.
A non-executive director appointed by the government will be part of the Board of each SecureCo to protect national security interests and to oversee any disinvestment of sensitive capability.
The government has also agreed to a deed offered by the companies to have a corporate headquarters of the Ultra Group in UK.
This also includes increasing engineering research and development (R&D) expenditure by a minimum of 20% in the next three years.
In addition, the companies have agreed to establish a scholarship fund of £5,000,000 to help 100 undergraduates in the UK to pursue degrees.
Cobham has also agreed to initiate various programmes to reduce greenhouse gas emissions to net-zero and promote diversity in Ultra Group’s UK workforce.
