The US takeover of UK defence 

Sell-off of key defence assets is hardly conducive to an independent foreign policy

Ultra’s technologies are used in the Eurofighter
Ultra’s technologies are used in the Eurofighter
(Image credit: Alexander Koerner/Getty Images)

“Yet another British defence manufacturer has fallen to the American greenback,” said Maggie Pagano in the Daily Mail. The board of Ultra Electronics – a major supplier to the Royal Navy – has agreed to a £2.6bn takeover by rival Cobham, which is owned by the US private equity group Advent. This means around £10bn worth of Britain’s most high-tech defence equipment has been sold to the US in a matter of months. Among other things, Ultra “makes highly sensitive equipment” for Britain’s nuclear fleet, said Alan Tovey in The Daily Telegraph. No wonder Whitehall’s “defence heavyweights” are so agitated. Moreover, Advent’s record hardly instils confidence. When it bought Wimborne-based Cobham for £4bn 18 months ago, it pledged to be a “good custodian” of the company – yet it almost immediately sold “a string of its assets”.

“You can’t really blame Ultra’s board for acquiescing to a deal at a record price,” said Helen Thomas in the FT. But ministers should be “sceptical”. As analyst Nick Cunningham of Agency Partners points out, UK defence firms, including Ultra, “were called upon to produce bespoke technology at speed” for the conflicts in Afghanistan and Iraq. “Yes, the US is an ally. But it is proprietorial about US-based defence technologies.” One thing seems clear: fears that stronger government oversight would have a “chilling effect” on dealmaking were unfounded. “Political uncertainty is apparently no match for the cheaper valuations offered by the UK market.” Perhaps buyers have looked at a government and Business Secretary “whose instincts tend towards the laissez-faire … and concluded it’s business as usual”. If ever there was a case that should prove them wrong, it is Ultra.

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