US-owned Cobham to buy Ultra Electronics for £2.57 billion
Cobham’s bid was first tendered on July 21, 2021, and it represents 63.1 percent premium over Ultra’s closing price of £21.56 per share on 24 June 2021. Certain employment undertakings have been made to the UK government as part of the deal.
Cobham, a UK based supplier of aerospace and technology, was acquired by US-headquartered private equity firm Advent International for £4 billion in January 2020.
Cobham said it 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 that they will offer legally binding and enforceable commitments to HM Government in respect of the Ultra Group.
The nature, form and duration of these commitments are to be agreed with the UK government. They are set to include commitments to invest in Ultra’s UK work force by protecting existing and creating new UK manufacturing and engineering jobs and apprenticeships and maintaining a UK headquarters.
It would also include a commitment to performing R&D in the UK and registering intellectual property rights in the UK.
The deal has been approved unanimously by Ultra’s and Cobham Group’s boards of directors but has to be approved by 75 percent of the shareholders.
The deal will also be subject to 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 1Q22.
Shonnel Malani, chairman of the Cobham Group, said: “We recognise the important role that a combined Cobham and Ultra will play in ‘five-eyes’ defence and are committed to protecting the continuity of supply to the UK and our allies. We look forward to working with HM Government, and other relevant stakeholders, to agree legally binding commitments which safeguard Ultra’s contribution to the UK economy and national security.”
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