© Ultra Group Business | August 23, 2021

Cobham wants all of rival Ultra; UK has issues with that

On 16 August 2021, Cobham Ultra Acquisitions Limited (Cobham) and Ultra Electronics Holdings plc (Ultra) announced that they reached agreement on the terms of an acquisition of Ultra.

Under the terms of the acquisition, each Ultra shareholder will receive GBP 35 (in cash) for each Ultra share. This would value Ultra at GBP 2.57 billion. The Ultra Board of Directors consider the terms of the acquisition to be fair and reasonable. Accordingly, the Board intend to recommend unanimously that Ultra shareholders vote in favour of the Scheme at the Court Meeting and the Resolutions to be proposed at the General Meeting. The acquisition will be subject to other terms and conditions, including the receipt of relevant antitrust approvals in Austria, Canada, Germany, Turkey and the US and foreign investment and regulatory approvals in Australia, Canada and the UK. The Acquisition is expected to become effective in Q1/2022. "Cobham recognises the specific importance of Ultra's contribution to the UK's economy and national security and therefore Cobham and Cobham Group Holdings have agreed with Ultra in the Cooperation Agreement that they will offer legally binding and enforceable commitments to HM Government in respect of the Ultra Group", a press release from Ultra reads. The commitments, which will apply immediately from completion of the acquisition, will cover the following matters and areas such as:
  • safeguarding and supporting the UK's national security, including appropriate protections for sovereign UK capability, continuity of supply and critical capabilities in the UK, and appropriate board composition and national security clearance arrangements
  • investing in Ultra's UK work force by protecting existing and creating new UK manufacturing and engineering jobs and apprenticeships and maintaining a UK headquarters
  • increasing investment in innovation, and research and development in the UK, including by continuing to develop UK-registered intellectual property rights for use in the UK and through investment in new regional technology centres of excellence and funding of academic institutions; and
However, this might not be enough for the UK government. The Secretary of State for Business, Energy & Industrial Strategy issued a public interest intervention notice (PIIN) on the public interest ground of national security in accordance with sections 42(2), 58(1) and 58(2) of the Enterprise Act 2002 (the Act). The Competition and Markets Authority (CMA) now has until January 18, 2022 to submit a report to the Secretary of State in accordance with section 44 of the Enterprise Act 2002.
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