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Advent acquisition of Cobham set to get government OK
19th Nov 2019 10:49
(Sharecast News) - Cobham shares rallied on Tuesday as the British government looked set to approve the London-listed defence company's proposed acquisition by US private equity group Advent International.
Business Secretary Andrea Leadsom said in a statement: "Following my update to Parliament on 5 November, I have now reviewed further national security advice from the Ministry of Defence and met with both Cobham and Advent who have offered legally-binding undertakings designed to mitigate national security concerns, which I am minded to accept."
The undertakings will now be considered by a public consultation and a further update will be provided once that process has concluded.
"No decision will be taken on whether to accept the undertakings until the consultation has closed and the representations have been carefully considered," said Leadsom.
The new proposed undertakings would require Advent to ensure that existing security arrangements which currently apply to Cobham and protect sensitive government information will be continued and strengthened.
They will also mean that Advent has to maintain capability and honour the terms of existing contracts and notify the MOD in advance if there is a material change to its ability to supply key services. Advent will also need to give the MOD notice if it plans to sell all or parts of Cobham's business.
Advent agreed in July to buy Cobham for £4bn or 165p a share in cash.
At 1045 GMT, Cobham shares were up 3.8% at 160.7p.
Business Secretary Andrea Leadsom said in a statement: "Following my update to Parliament on 5 November, I have now reviewed further national security advice from the Ministry of Defence and met with both Cobham and Advent who have offered legally-binding undertakings designed to mitigate national security concerns, which I am minded to accept."
The undertakings will now be considered by a public consultation and a further update will be provided once that process has concluded.
"No decision will be taken on whether to accept the undertakings until the consultation has closed and the representations have been carefully considered," said Leadsom.
The new proposed undertakings would require Advent to ensure that existing security arrangements which currently apply to Cobham and protect sensitive government information will be continued and strengthened.
They will also mean that Advent has to maintain capability and honour the terms of existing contracts and notify the MOD in advance if there is a material change to its ability to supply key services. Advent will also need to give the MOD notice if it plans to sell all or parts of Cobham's business.
Advent agreed in July to buy Cobham for £4bn or 165p a share in cash.
At 1045 GMT, Cobham shares were up 3.8% at 160.7p.