Page 106 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

The UK Defence Industry in the 21 Century
st
The Five Forces of Americanisation

management: politically well-connected, intellectually and technically outstanding and free
from many of the constraints of the well-regulated banking and public company communities

• One of the firm’s most well-known investments was Dyncorp International, acquired in 2010
for around US$1 bn. Its provision of services for the US military had involved operations in
several conflict zones, including Iraq, Afghanistan, Bolivia, Bosnia, Somalia, Angola, Haiti,
Kosovo and Kuwait, with over 90% of its sales derived from the US government, It was
acquired by Amentum Holdings in 2020 for an undisclosed sum.
• On March 14, 2025 – “Cerberus Capital Management, L.P., a global leader in alternative
investing, today issued the following statement:
“We are incredibly proud of our Co-Founder Steve Feinberg on his confirmation as the 36th
Deputy Secretary of Defense of the United States. We know that Steve will bring to this vital
role the same intelligence, energy, and commitment that we have experienced for more than
three decades at Cerberus.
On behalf of Cerberus’ global team, we congratulate Steve on his appointment and thank him
for building the Firm into the leader it is today.”
• It remains to be seen who will acquire Ultra’s Maritime & Land (now called Command & Sonar
Systems) business. Israel’s Elbit Systems could appear a front runner. This would probably not
be the outcome expected when UK Secretary of State for Business, Energy & Industrial
Strategy Kwasi Kwarteng approved the sale of Ultra: enabling an Israeli firm to acquire UK anti-
submarine warfare technology.
This does, however, appear unlikely at present, since the DoD is monitoring the situation
closely. It does not want to see too much supplier consolidation in the area. Interestingly,
supplier consolidation likely to limit wider technological development is cited as the reason
why the US Department of Justice rejected Ultra’s acquisition of Sparton.

“Addressing Intellectual Property Limitations.
“Certain practices surrounding intellectual property (IP) and data rights have been used to limit
competition in DoD purchasing and to induce “vendor-lock” and other undesirable results. DoD will
implement best practices for identifying its long-term IP needs early in the competitive phases of
acquisition programs, ensuring IP is an evaluation factor in competitive awards and a negotiation
objective in solesource awards, and contracting with vendors who are willing to provide the
government the IP deliverables and rights it needs.
“In its ongoing modernization of its approach to IP rights, DoD should do what it can to create IP-
related procedures that do not result in unnecessary anticompetitive consequences.”
(Department of Defense Report on Executive Order 14017, America’s Supply Chain, February, 2022)

Looking at Sparton’s change of ownership, the role of Cerberus (ie: acquiring a business then
breaking it up, with the defence element sold to a buyer that met the DoD’s IP protection
needs) could be viewed as a normal market intervention. Alternatively, if Cerberus was shown
to have been encouraged to act by the DoD, it could be seen as an example of the DoD’s
“modernized approach to IP rights”. Whatever the case, it seems to have produced an
outcome that suited the DoD’s long term IP needs and met Cerberus’ investment returns’
objectives.

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