THE JOURNAL OF EXPORT CONTROLS AND SANCTIONS

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UK government intervenes in defence sale on national security grounds

September, 2019

Secretary of State issues ‘a European intervention notice to intervene in the [£4bn] proposed sale’.

UK government intervenes in defence sale on national security grounds

The UK government has intervened – citing national security reasons – in the case of a British defence company, Cobham, which had agreed to a proposed £4bn takeover by a subsidiary of the US private equity firm Advent International. Cobham describes itself as ‘a leading global technology company and services innovator, respected for providing solutions to the most challenging problems, from deep space to the depths of the ocean.’

The UK Department of Business, Energy and Industrial Strategy said in a statement that Secretary of State Andrea Leadsom ‘had issued a European intervention notice to intervene in the proposed sale on national security grounds.’

It said: ‘She has written to the Competition and Markets Authority (CMA) to inform them of her decision to intervene and instructed them to investigate. The CMA will now prepare a report on the national security aspects of the proposed transaction. This is a statutory process to ensure national security implications of a proposed sale are fully assessed. The CMA has until midnight at the end of 29 October 2019 to complete and submit this report to the Secretary of State.’

The intervention is believed to have been issued after members of the family that had built up the company, which currently employs 10,000 people, had raised their concerns. Lady Nadine Cobham, widow of founder Sir Michael Cobham, told press, ‘It’s an opportune moment for Advent to pounce and the reality is that Advent will break up Cobham and sell off its parts to the highest bidder. This may well include air-to-air refuelling, which is a real shocker.’

 

The intervention notice is at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832152/Cobham-Advent_European_Intervention_Notice__-_17th_September_2019__002_.pdf

 

 

Topical issue

The WorldECR Forum in London, October 3 and 4, will feature a number of Defence- and National Security-focused sessions including:

  • Hogan Lovells’ partner, Lourdes Catrain will present on ‘Europe – tightening the reins on foreign investment?’
  • Baker Hostetler partner, Barbara Linney will present on ‘National Security laws and due diligence preparedness’
  • Northrop Grumman Regional Trade Compliance Manager for Europe, Arthur Browne will present on ‘Defence supply chain, risks and challenges’

 

To download the full programme, visit: https://www.worldecr.com/conference/

 

 

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