Government waves through contentious £4bn takeover of defence giant Cobham by US private equity firm

Fears remain that deal places one of UK’s biggest military contractors in hands of overseas power: ‘This is not taking back control so much as handing it away’

Cobham is a leader in air-to-air refuelling technology (Reuters)

A controversial £4bn takeover of the British defence giant Cobham by a US private equity firm has been given the green light – despite concerns the merger could undermine national security.

The deal had been delayed since July amid fears it essentially places one of the UK’s biggest military contractors in the hands of an overseas power.

But the move, which will see Advent International acquire the 85-year-old company, was officially signed off by the government late on Friday afternoon.

The timing led to accusations that ministers were using the upcoming Christmas holidays to avoid proper scrutiny of the deal.

Cobham, which is based in Dorset and employs 10,000 staff, is a leader in air-to-air refuelling technology, and is a major supplier to the British military.

The deal with Advent was criticised because of the private equity firm's lack of experience in the sector and the short-term mindset of investment companies.

The Ministry of Defence also feared the security of military information held on the firm's systems could be undermined if Advent decided to sell off sections of the business.

Andrea Leadsom, the business secretary who led the government consultation process, said she was confident the takeover would not compromise security.

She waved the deal through after Advent agreed to a series of legal undertakings, including protecting sensitive information and giving notice to the government if there were ever any future plans to sell the firm.

She said: “This decision has been meticulously thought over, and I have taken advice from the defence secretary, the deputy national security adviser and government officials across multiple departments.

“Having considered the consultation responses and further advice from the defence secretary, I am satisfied that the undertakings mitigate the national security risks identified to an acceptable level and have therefore accepted them and cleared the merger to proceed.”

But Lady Nadine Cobham, the daughter-in-law of the company’s founder Sir Alan Cobham, criticised the decision.

“This is a deeply disappointing announcement and one cynically timed to avoid scrutiny on the weekend before Christmas,” she said. “In one of its first major economic decisions, the government is not taking back control so much as handing it away.”

When asked during a visit to see British troops in Estonia how comfortable he was with the takeover, Mr Johnson said: “I think it's very important that we should have an open and dynamic market economy.

“A lot of checks have been gone through to make sure that in that particular case all the security issues that might be raised can be satisfied and the UK will continue to be a very, very creative and dynamic contributor to that section of industry and all others.”

Additional reporting by PA