The UK Government’s Business Secretary Andrea Leadsom has not yet made a decision on whether the £4bn sale of British defence and aerospace company Cobham to Advent International can go ahead.
The deal, approved by Cobham’s board in July, has been on pause after the Government raised concerns about the potential sale on grounds of national security.
In a written ministerial statement submitted to parliament today, Leadsom confirmed she had received a report into the deal from the Competitions and Markets Authority (CMA) and revealed that Defence Secretary Ben Wallace had raised concerns over the sale with Leadsom.
The statement reads: “The Secretary of State for Defence has also written to me about the national security implications of the merger and the discussions which have taken place with the parties to propose undertakings to address those implications. I am grateful for the advice I have received and the constructive engagement from the parties.”
Leadsom added: “The decision on how to proceed in this case requires further full and proper consideration of the issues. Having received these reports, I will, therefore, have further discussions with my ministerial colleagues and the parties to the transaction to inform the decision-making process.”
The statement does not provide a timeframe for when a decision could be expected however Leadsom said the legal process will continue during the general election period.
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In September, Leadsom announced an investigation into the sale saying: “Following careful consideration of the proposed takeover of Cobham, I have issued an intervention notice on the grounds of national security.
“As part of the statutory process, the Competition and Markets Authority (CMA) will now investigate and carry out a review on the national security implications of the transaction. They must report back to me by 29 October 2019.”
Leadsom blocked the deal under the Enterprise Act 2002 which gives the British Government the power to intervene in mergers on ‘public interest grounds relating to national security’.
Cobham’s share price immediately dropped by 2% after the statement was released.