back to article British defence supplier Ultra Electronics to be sold for £2.6bn to US-controlled firm

British defence tech specialist Ultra Electronics has been bought for £2.6bn by a US private equity firm, through a wholly owned UK subsidiary that was itself once a proud standalone business. Ultra's acquisition by Cobham Group plc, owned by US fund Advent International, sees the defence firm's shareholders receive £35 per …

  1. Anonymous Coward
    Go

    LOL

    Come on down to the Britannia Unchained sale where you can pick up real bargains today! Two-for-One and 3 for 2 deals available now!

  2. cookieMonster
    WTF?

    doesn't bode well for Britain's industrial future

    That disappeared decades ago

    1. Paul Herber Silver badge

      Re: doesn't bode well for Britain's industrial future

      Marconi, Racal, GEC, Plessey, Dowty, Ferranti, Lucas, Decca ....all gone.

      1. devin3782

        Re: doesn't bode well for Britain's industrial future

        Don't forget ARM

      2. Anonymous Coward
        Anonymous Coward

        Re: doesn't bode well for Britain's industrial future

        Marconi, Racal, GEC, Plessey, Dowty, Ferranti, Lucas, Decca ....all gone.

        Well Marconi and Plessey were both bought out by the darling of the conservative government, GEC, who then decided to get rid of their cash cow defense business to BAe and go into the exciting world of telecoms, only to find that in a world bereft of national protectionism (which basically defence is), they could not compete. I worked for GEC - there was not much worth saving

        Ferranti decided to get into bed with a international arms dealer who then bled them dry (Good technology company, terrible management)

        Lucas are still used as a byword in some parts of the world for terrible electronic products.

        Ironically Ultra electronics ironically is the rump of Dowty

        To be truth none of these companies could be considered world leading, and probably rely to much on defence markets therefore rely on the public purse teat, rather than being progressive and international aggressive. T

        1. James Anderson

          Re: doesn't bode well for Britain's industrial future

          Joseph Lucas ..... Prince of Darkness.

    2. HammerOn1024

      Re: doesn't bode well for Britain's industrial future

      For those that are worried, have a look at all the defense contractors scooped up by BAE, ya know, British Aerospace Electronics, here in the United States.

      If you are so concerned, get together with a few million of your closest friends and pitch in 1,000 pounds each to buy it yourself. I would think that 10,000,000,000 - 30,000,000,000 pounds should make a nice purchase with plenty of capital left over for improvements and expansion.

      Otherwise: Talk to the hand 'cause the face ain't list'en!

    3. Woodnag

      Don't forget money laundering!

      Uk still a leader there!

  3. devin3782

    I feel the need to re-iterate, the great british sell-off continues apace.

    1. Paul Herber Silver badge

      Selling England By The Pound

      1. devin3782

        I was going to use that, but I felt that being in my late 30's I was too young to use a genesis lyric

      2. WhereAmI?

        till waiting to see them on the Domino tour... been cancelled here three times now.

    2. Anonymous Coward
      Anonymous Coward

      It is the Will O' The People. ™®

  4. Anonymous Coward
    Anonymous Coward

    > headline-grabbing government powers allowing deals to be cancelled over national security concerns have not, in fact, been used to do so.

    Not least because they don't come into force until 2022.

  5. Primus Secundus Tertius

    You gotta pay for it

    If British firms were interested, they could have bid for Ultra. But they were not.

    The government could confiscate it (i.e. nationalise without paying). Or they could legitimately nationalise it. But the Treasury is not interested.

    Is this government and establishment worth defending? Some people will have doubts.

  6. Scott Broukell

    Warfare is, after all, only a commercial matter - nothing to see here, move along there!

    1. Anonymous Coward
      Anonymous Coward

      Sustainable War™®

      1. Scott Broukell

        Sustainable War™®

        Well now lets see, there's lots of stuff that is Green in the military, so yeah, there's that - right?

  7. @JagPatel3

    Market concentration in the defence industry

    A central issue that people never bother to consider when commenting on this type of M&A in the defence sector is the likely narrowing of market participants supplying equipment to the Armed Forces – given that it is such an important factor underpinning the proper functioning of open markets.

    Fortunately, the Business Secretary is minded to consider exactly this question during his deliberations!

    If consolidation serves to tackle the problem of persistent delays and cost overruns on defence procurement programmes, then one can be sure that government will be in favour of it. Sadly, the reality is that consolidation only makes the situation worse because it leads to concentration and a reduction in competition.

    Consider this simple fact. According to statistical data cited by House of Commons Library briefing paper CBP 08486 (on p32), over 42% of MoD’s expenditure on defence procurement for 2017-2018 amounting to over £17bn was spent on just ten suppliers. What’s more, this market share has remained pretty much the same over the last decade. Even the then C&AG, Sir Amyas Morse (who was previously Commercial Director at MoD) came around to the view that there is unhealthy market concentration in the defence industry. The current National Security Adviser who was previously MoD Permanent Secretary has also acknowledged that the defence equipment market has become much more concentrated.

    It is hard not to conclude that this stranglehold by the Select Few has been the cause of poor performance and a lack of competitiveness – characterised by persistent delays, cost overruns and chronically weak export performance.

    Market concentration has been allowed to grow unhindered over the last several decades because successive generations of MoD civil servants and Ministers haven’t got a clue how free markets work, not least, because they have never “felt the heat” of competitive market forces or spent a single day of their lives in the private sector.

    The good news is that development of competition policy has now been taken out of the hands of MoD and transferred to BEIS under this pro-market, pro-competition government – which opens up the possibility that the Business Secretary could exercise his powers to direct the Competition and Markets Authority to conduct an investigation into the state of the defence equipment market.

    Instead of following the usual tried-and-failed MoD-driven approach, this probe should be led by BEIS informed by the CMA investigation with inputs from 10 Downing St, Cabinet Office, HM Treasury, FCO, DIT and MoD.

    Sharpening competition has the beneficial effect of offering the opportunity to elicit input of private sector investment capital into each phase of MoD equipment procurement programmes, thereby relieving the burden on the public purse and freeing up much needed taxpayer funds that can be diverted onto the “levelling up” mission.

    An innovative proposal on how to elicit private sector investment capital into defence procurement programmes is set out in a written submission to the Public Accounts Committee which completed its inquiry into Defence Capability and the Equipment Plan 2019-29 last year.

    The pdf copy of this paper can be accessed via this link:

    https://committees.parliament.uk/writtenevidence/5413/pdf/

    @JagPatel3

    1. Mike Richards Silver badge

      Re: Market concentration in the defence industry

      Lewis, formerly of this parish, was long ranting about the taxpayer endlessly subsidising BAE so it could go and buy American defence companies.

  8. Cybersaber

    Possible smokescreen?

    The economic concerns about selling off IP and industrial capacity are very valid and discussion-worthy concerns.

    The defense angles seem less so; We (the USA) already supply a great deal of the warfighting technology Britain uses.

    After that unfortunate tea-spilling incident and a little scuffle over taxes, our countries have been getting along like a house on fire, and there's little to no sign of that changing. I'd have no problem sourcing critical technologies and infrastructure from a British company*. This seems like a smokescreen/proxy for the _actual_ valid arguments over whether it's good for the UK economy or not (see first sentence.)

    *Jokes about fire extinguishers Made In Britain aside. ;)

    1. EvilDrSmith Silver badge
      Joke

      Re: Possible smokescreen?

      "our countries have been getting along like a house on fire"

      Would that be a White House? Golly is that the time, 14 minutes past 6 already...

      (though actually, I broadly agree with the sentiment, so have an upvote)

  9. Doctor Syntax Silver badge

    "albeit one headquartered in an allied country"

    The Afghan government probably thought they were an ally.

    The US doesn't have allies. It has interests.

  10. Pascal Monett Silver badge

    "a Labour Party shadow minister questioned

    Well, now you know the business model, the future governance and operational freedoms. They will be dictated by the USA.

    Methinks you should have worried about that before the sale took place.

    1. Lil Endian

      They will be dictated by the USA

      --- They will be dictated by the UK via the USA ---

      The UK owns the third largest debt of the USA. It's a meager ~$370bn compared to India (~$1.3tn) and China (~$1.1tn). But it's way past lend/lease.

      The UK is doing what it does best - manipulating. It outsources its armed forces requirements to the US - armament, ordinance and personnel. It doesn't help the women, men or children that are its assets (that's what UK citizens are, assets of the state by definition - bye bye common law. No binding constitution. Not even a national flag.).

      More dosh flows through the UK (offshore shell companies etc), ie the UK establishment, than any other nation.

      Forget the mainstream press, or any other media. The UK establishment is very good at its international connivances, at the sufferance of its citizens.

      Fuck the proles. Still, at least the weather's nice.... ahem.

      1. Lil Endian

        Edit

        ordinance

        ordnance

  11. hoola Silver badge

    Utterly Spineless Bunch of Clowns

    We have allowed and continue to allow any high tech or critical industries to be bought by foreign (usually US companies) so that a few snout-in-trough directors can get rich.

    Cobham, the outfit buying Ultra has already been sacrificed so it is no surprise that Ultra is as well. Does it not occur to these muppets in power (that is any Government & the twats is the Civil Service) that we have world leading technical and design people in the UK who are very good at what they do.

    Basically most directors and all politicians would sell the parents, grand parents and probably children if they could.

    In reality there is pretty much nothing left, not that long ago GKN was under pressure to "deliver value to shareholders", in other words, sell sectors or itself.

  12. Anonymous Coward
    Anonymous Coward

    Why do we care?

    Yes! we have usage cases for heavy guns to control local unrest but....

    Physical warfare has had its day. Takes months to deploy a physical force, costs countless lives (in battle and accidents). Nobody has a clean win.

    Takes seconds to take down infrastucture with a well planned cyber attack or days to take out a population with a disease.

    Its like ordering millions of bullets for guns to fight a battle in space. Wrong weapon, wrong supplier!

    Maybe worry when the same happens with pharmacueticals and coding firms

    We really need to move on. This is so 1940's

    1. Lil Endian

      Proxy wars are still a thing, carefully monitored coordinated by those with the vested interest. Keeping an eye on Africa?

      Enemy image is still a thing, and required by governments to ensure that their population knows "we're right, they're wrong". (I'm not talking about oppressed populations here, just the concept.)

      So yeah, major powers don't want an open show down, too costly. But sabre rattling is cheap. This applies to technological infrastructure attacks as well as open warfare. Tit-for-tat would ensue, and all parties would suffer. It's the new nuclear stalemate.

  13. AGOO

    All that matters is the shareholder. All else is secondary to the pirates in power.

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