Page 97 - 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

▪ encourage the board to take steps to maximise both shareholder and societal value, restoring
stability and discipline through optimising the business portfolio, focusing on cash generation
and supporting a credible leadership team.
It appears that the decision to sell the Company had been taken before a new Chairman was appointed
in May, 2019. His experience as a former non-executive member of the Defence Support Group and
the Army Training & Recruitment Agency boards may have suggested an appreciation of the national
interest issues arising from the sale to Advent. However, this did not inform Cobham’s formal evidence
to the CMA in response to the MoD’s concern that access to important UK technology would be lost.
“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)

Cobham’s “evidence” was without substantiation. It was not an uncommon point of view but wide of
the mark, nonetheless. Its submission tends to confirm that, by the time the CMA has been asked to
review a proposed deal, the die has already been cast; as least as far as the parties involved were
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concerned. This is reflected in the timing: CMA report issued - 29 October; acquisition announced –
less than two months later, on or around 20 December. Indeed, it would seem to follow that the
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evidence presented by both parties to the transaction would reflect a sentiment of “fait accompli”. A
new, mission-specific Chairman has been appointed by the seller; a reassuring announcement of the
deal to employees has been scripted; the fees, commissions, bonuses and compensation have been
agreed in principle; directors have found their next jobs; short holiday breaks have been booked;
buyers of businesses to be sold have been identified.
“the takeover of Cobham is rotten on purely commercial grounds. A timid board rolled over too
easily and weak shareholders voted by a 93% majority for the sugar rush of a 34% takeover
premium … A well-run Cobham … could surely have done better over the long term by keeping its
independence. Short-termism won and may continue to do so – Advent will probably make a
bumper profit by selling Cobham in pieces within five years”
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(Nils Pratley, The Guardian, 19 September, 2019)
Pratley reflected a common view in financial markets at the time. His comments were remarkably
prescient. Advent International had, within four years, reportedly received over £5.4bn source in
proceeds from selling seven discrete Cobham business units, from Aviation Services to Slip Rings and
Aerospace Connectivity to Aerospace Communications … and Flight Refuelling (“Cobham Mission
Systems”), a capability cited by NATO as critical to the success of its join British-French-Canadian Air
Forces campaign in Libya in 2011 … and without which, as several commentators have pointed out,
the then UK Prime Minister Margaret Thatcher could not have invaded the Falklands in 1982.

“A proposed sale of Cobham’s aerospace communications business will take to over $7 billion the
total raised through the steady dismantling of the group by its US private equity owners.
“Advent International acquired Cobham plc in January 2020 for $4 billion and since then has
divested eight business units generating proceeds of $6.1 billion, according to company filings.”
(Dominic Perry, Flight Global, July 2023
Whilst condemning the sale on financial and business grounds, Nils Pratley did not consider the sale a
threat to national security. Neither did Business Secretary, Andrea Leadsom, who approved Advent’s
purchase. The new owners of Cobham’s subsequently divested businesses include large US and French
publicly listed corporations. None of the remaining businesses have manufacturing operations in the
UK.

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07/07/2025 Richard Hooke 2025