Page 67 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

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

One should also bear in mind that, when any ITAR-restricted US technology (even
when, as here, the UK Government funded its development) is applied to enhance or
modify any of Cobham’s equipment, highly likely if acquired by a US corporate or
“trade” buyer, the whole system becomes similarly restricted by the US government.
“Yes, the US is an ally. But it is also proprietorial about US-based defence technologies. That
arguably limits the benefit from common ownership of US and UK-based business in this
sector ...“ (Helen Thomas, Financial Times, August, 2021)
Th
The CMA’s significantly redacted findings, published on 29 October, 2019, made it
clear that these arguments against the sale to Advent were all made by the Ministry
of Defence, the Home Office and a number of “third party” experts.
“Cobham also submitted that Advent is in any event a US company, and that the
US is a key ally of the UK, a member of NATO and the Five Eyes community, and
that the UK-US defence and security relationships are extremely close and
intertwined, well-developed and built on long-standing trust.”
(AI Convoy Bidco - Cobham: A report to the Secretary of State for Business, Energy
& Industrial Strategy on the anticipated acquisition by Al Convoy Bidco Limited of
Cobham Plc: Competition & Markets Authority; 29 October, 2019)
Unlike Helen Thomas’ (Financial Times, see previous page) reaction, Cobham’s formal
response was inaccurate at best, misleading at worse. Most observers would be
surprised that the opinion set out by Cobham in the highlighted words above were
submitted as “evidence”, without any statistical or third party substantiation relevant
to US technology transfer. It is not clear whether the CMA or the Business Secretary
relied on the accuracy of Cobham’s statement in making her judgement. However,
when Cobham’s board submitted this evidence, the terms of the sale had been agreed
in principle, compensation, fees, bonuses and commissions had been fleshed out,
potential buyers identified for the businesses subsequently to be divested, surplus
properties, plant and equipment catalogued, future career moves lined up, post-deal
commitments – often the last detail - have been worded, debated and reworded. As
investment bankers know, when a deal gathers momentum, keep it going: it is difficult
to stop.
“Despite the assurances, the reality is that “all of the major technologies that
Cobham had, no longer reside with us”, said Gordon Page, a former chief executive
and chair at the company, who opposed the Advent takeover in 2019.
(Sylivia Pfeifer and Kaye Wiggins, Financial Times, July, 2021)
This is the new reality of the modern UK defence company CEO running a multi-
disciplined, multinational group listed on a London Stock Exchange and aiming, like
any commercial CEO, to satisfy the aims of its varied group of stakeholders, of which
national security may only be one of several. Above all, they need to achieve the
specific goals set by their boards of directors that are reflected in performance-related
remuneration. If misaligned, these goals will distract management’s efforts to achieve
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goal congruence .
“We have worked intensively over the last two and half years to focus on our
customers and our financial and operating performance,” said David Lockwood,
chief executive of Cobham. “These fundamentals, along with the investment in the
business Advent can provide, will enable us to leverage the quality of our products
and services.”
(Financier Worldwide October 2019)

The Cobham CEO’s reassurance to employees subsequently seems wide of the mark,
made clear in a Bain Capital Global Private Equity Report published four years later.

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07/07/2025 Richard Hooke 2025