Defence firm Cobham said on Monday it had agreed to buy Ultra Electronics in a deal valuing its UK-listed rival at 2.57 billion pounds ($3.56 billion), setting out commitments aimed at allaying any potential concerns over national security.
Shareholders in Ultra, which counts the British and U.S. governments as customers, will receive 35 pounds a share, in line with a price offered in July, which Cobham said at the time had been sweetened from an initial 28 pounds per share bid.
Cobham, which was taken private by U.S. private equity firm Advent last year, said it will safeguard and support the UK’s national security and create new manufacturing and engineering jobs and apprenticeships. It will also protect existing jobs, maintain a UK headquarters and boost investment.
In order to protect Ultra’s businesses and stakeholders, Cobham said it will engage with the British government to agree details of its binding commitments – including their duration and form.
Ultra shares were 4.4% higher at 33 pounds by 0726 GMT.
“Cobham recognises the specific importance of Ultra’s contribution to the UK’s economy and national security,” Cobham and Ultra said in a joint statement.
Dorset, England-based Cobham, which is known for its pioneering air-to-air refuelling technology, also said it will ensure the continuity of supply and critical capabilities in the UK, an appropriate board composition and national security clearance arrangements.
The British government, which said it was closely monitoring the Cobham bid in July, did not immediately respond to a request for comment on Monday.
The deal will help Cobham tap the maritime defence market, where Ultra sells sensors and torpedo and radar systems, mainly to Western customers. Ultra also makes a range of defence communication equipment and forensics software.
Ultra’s larger rival, British aerospace and defence group Meggitt, is also the subject of takeover interest and has received bids from American companies Parker-Hannifin and TransDigm.
Parker’s bid also included a series of pledges to the British government on jobs and security.
Source: Reuters.com