French plunder Cobham’s aerospace business in £850m deal
French loot Cobham’s aerospace business in £850m deal as UK defense group’s break-up continues
The breakup of British defense group Cobham continues as its aerospace business was sold off by US private equity owners yesterday.
French manufacturing company Thales bought Cobham Aerospace Communications in an £850 million deal.
The Paris-based division, part of the Cobham group since 1989, makes aerials and communications systems for aircraft and is expected to generate around £154 million in revenue this year.
The acquisition, which closes next year, adds to the number of Cobham units sold by US private equity giant Advent International since it bought the group in 2019 for £4 billion.
Although the government investigated whether the acquisition posed a risk to national security, it nevertheless gave the green light.
Sale: French manufacturing company Thales bought Cobham Aerospace Communications in a £850 million deal
It means seven of Cobham’s business branches have now been sold since 2019, with an unnamed analyst labeling Advent’s actions as “despicable” and “asset-stripping at its worst.”
Founded in 1934 by Sir Alan Cobham, who pioneered the technology to allow aircraft to refuel in the air, the company originally specialized in aerospace manufacturing and had contracts with the British Army.
Lady Cobham, the founder’s daughter-in-law, previously expressed her concerns about the ‘auction’ of British high-tech defense companies, especially in the wake of the invasion of Ukraine.
Last night she said she wasn’t surprised. “I always thought Cobham would be sold little by little.
“Despite Advent’s assurances to the contrary, this is exactly what is happening.”
The company had 10,000 employees, with 1,700 in the UK. But since going private, most of the empire has been sold off, leaving it with no production in the UK.
Advent has raised £5.4bn from the group’s steady dismantling, leading some critics to suggest Cobham is a ‘warning tale’ for UK companies looking to sell to US private equity sharks.
Cobham was the first in a succession of deals targeting some of Britain’s most progressive companies, including satellite maker Inmarsat and aerospace company Meggitt – both sold to private equity firms.
Danni Hewson, an analyst at AJ Bell, said: ‘It is sad but not surprising to see the once great Cobham empire cut to pieces.
“With many British companies drawing admiring glances from potential suitors, this could be a cautionary tale.”
Boston-based Advent also acquired British defense company Ultra Electronics.
The £2.6bn 2022 takeover came after months of discussions over whether the producer of sensitive nuclear submarine systems should be sold to an overseas buyer.
Advent agreed to the terms set by the government before the deal was green-lit.
They include protecting existing jobs, maintaining a UK head office and boosting investment.