Page 96 - Five Forces of Americanisation Richard Hooke 04072025 final post SDR1

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

None of the three components of the group-wide consulting programme seemed likely to create
value. Each part was aimed at standardisation and integration when the group itself was consistently
shifting in composition as businesses were bought and sold.

Cobham plc
… and in its leadership team

As well as a number of strategy reviews and the “Excellence in Delivery” consulting programme,
Cobham also experienced four Chief Executives, three Finance Directors, three new Group Executive
Vice Presidents, two Rights Issues, ten disposals and eight acquisitions. All within the space of seven
years.

During this period, Cobham’s enterprise value had increased by £324 million (around 10%) but it had
invested a net £1 billion in acquisitions. Its share price performance, compared with its UK peers, made
it clear that company-specific problems were the cause of what was becoming a continuing decline in
performance: instability in its senior management, an M&A process gone awry and a poor grip on
performance. All previously Cobham strengths.

Cobham plc Share Price Performance vs UK Peers
2010 to 2017
%

At this point, the dilemma for shareholders and their representatives on Cobham’s board was whether
the company’s continuing instability, reflected in its share price’s performance relative to its peers,
should
▪ prompt its break up or sale to a third party at a time when it was trading at a historically low
level of value or

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