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Tue, 31 March 2020

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Boris Johnson defends £4bn sale of UK defence company to US private equity firm

Boris Johnson defends £4bn sale of UK defence company to US private equity firm
2 min read

Boris Johnson has defended a £4bn deal which will see a US private equity firm purchasing a major British defence company, depsite concerns from UK military leaders.

The Prime Minister said a "lot of checks" had been undertaken before the decision was made to allow the sale of UK-based defence and aerospace firm Cobham to US private equity company Advent International.

It comes after the major takeover bid of the firm, which holds "critically important" defence technologies was previously delayed due to national security concerns.

But speaking after the sale was announced, Mr Johnson said it was "very important that we should have an open and dynamic market economy".

Mr Johnson, speaking on a visit to British troops based in Estonia, added: "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."

The sale comes after a review from the Competition and Markets Authority found the Ministry of Defence had concerns over "unauthorised persons" having access to information about UK defence capabilities as a result of the takeover.

But in a statement on Friday, Business Secretary Andrea Leadsom said the risks had been reduced to an "acceptable level", allowing the deal to go ahead.

However, the deal provoked anger from Lib Dem acting leader Sir Ed Davey, who described the US takeover as "deeply concerning".

"It is deeply concerning that the Conservative government is allowing this sale to go ahead, depsite previously cited concerns that it could undermine our national security. While Andrea Leadsom claims these concerns have been "mitigated", we have yet to see evidence of this," he said.

"If Boris Johnson's government are happy to sell off a leading UK defence and aerospace company to Trump's America, how can we expect his government to protect our defence and manufacturing sectors, not to mention every other sector of our economy, as they negotiate trade deals after Brexit?"

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