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Written question asked by Julian Lewis (Conservative) on Monday, 2 September 2019, in the House of Commons. It was due for an answer on Thursday, 5 September 2019 (named day). It was answered by Anne-Marie Trevelyan (Conservative) on Thursday, 5 September 2019 on behalf of the Ministry of Defence.

Defence: Procurement

Question

To ask the Secretary of State for Defence, what the Government's policy is on the acquisition of major UK-based defence companies by overseas investors; what assessment he has made of the prospect of such companies being willing to (a) enter into, and (b) deliver long-term defence contracts after they have been taken over by private equity firms structured so as to make long-term ownership improbable; and whether undertakings in respect of the (i) pursuit and (ii) fulfilment of long-term defence contracts have or will be sought from Advent International its proposed acquisition of Cobham plc.

Answer

Changes of control within the defence sector are largely a matter for the companies concerned. Ministers can intervene in mergers on public interest grounds including for reasons of national security with each merger considered on a case by case basis. We can take action through private undertakings in the form of security deeds, or via statutory means under the Enterprise Act 2002.

The MOD provides advice in this process to the relevant Secretary of State, who has a quasi-judicial role in deciding whether to intervene in mergers. The Secretary of State must consider only the evidence relevant to the public interest grounds raised. This also means that it is not appropriate for the Government to provide commentary on whether public interest concerns arise in relation to a merger ahead of any decision on whether to intervene.

Secondary information

Type
Written question
Reference
285109
Session
2017-19
Subjects
Defence Procurement Takeovers Cobham Advent International
Link
View this Written question on www.parliament.uk