Workers' Weekly On-Line
Volume 50 Number 1, January 4, 2020 ARCHIVE HOME JBCENTRE SUBSCRIBE

Cobham Takeover

Takeover of Cobham Multinational Reveals
Narrow Private Interests Striving to Dominate World Today

In the wake of the general election, the government has approved a private takeover by US "equity companies" of the British "public company" Cobham PLC, a major supplier of military and commercial systems on land, sea, air and space. The company, which employs in excess of 10,000, is a multinational company based in Dorset. On its website, the company cites amongst its operations the "probe and drogue refuelling systems [that] are on every major tanker programme in progress today" and is the "market leader in military helicopter personal thermal management and restraint systems". Cobham also provides "operational readiness training for NATO air, land and maritime forces as well as sophisticated electronic assemblies for the the fighter planes EA-18G Growler, F-35, and UAVs (drones)".

In July, the Cobham Board had approved the takeover by a newly formed equity fund company AI Convoy Bidco Limited, which is an indirect subsidiary of funds managed by US Advent International and the Blackstone Group[1]. The government ordered a review by the Competitions Market Authority (CMA), which produced a report that has been heavily redacted[2]. The CMA in its report makes an assessment and gives advice to the Secretary of State "that does not contain advice or give recommendations on the public interest" of this takeover by Advent and Blackstone. The government then announced its approval of the takeover on Friday, December 20, 2019 once it had received "safeguards" on "security issues".

Quoted in a BBC news report on the takeover, Lady Nadine Cobham - part of the family which set up the British firm - called the decision "deeply disappointing" and criticised the timing of the decision. She said it was "cynically timed to avoid scrutiny on the weekend before Christmas", adding: "In one of its first major economic decisions, the government is not taking back control so much as handing it away." In a report in the Guardian, Boris Johnson defended the sale. He said: "I think it's very important that we should have an open and dynamic market economy. A lot of checks have been gone through to make sure that in that particular case all the security issues that might be raised can be satisfied and the UK will continue to be a very, very creative and dynamic contributor to that section of industry and all others."

However, the takeover of Cobham has nothing to do with the government's support for a "dynamic market economy" nor can it be posed as a question of "taking back control". Instead, once again, it reveals how the economy is caught in the grip of the raging competition between one faction and another of the narrow private interests that are striving to dominate the world today. This raging competition is even more pronounced in the industries based in war production that are so dominant in the British economy. These companies make obscene profits from government contracts and sales abroad, all in the service of paying the financial oligarchy and fuelling wars in their interests against the interests of the people at home and abroad. The issue of having a dynamic economy and taking control from these multinationals is the question that the working class and people must take up as a fight for a new direction for the economy which serves their interests, not competing interests of oligarchies.

Notes

[1] According to the Competition and Markets Authority (CMA) the US companies involved in the takeover of Cobham are AI Convoy Bidco Limited ("Bidco") an "indirect subsidiary of funds managed by Advent International Corporation funds managed by Advent International Corporation (Advent); ...and funds managed by GSO Capital Partners LP, Blackstone Tactical Opportunities Advisors LLC and other managers affiliated with The Blackstone Group Inc." AI Bidco is registered with Companies House and set up in July 2019 to facilitate the takeover with two Directors, one who has no other previous registered directorships with Companies House, and the other has resigned 35 directorships over the last decade.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/846837/cobham-advent-international-cma-report-redacted.pdf

[2] Ibid.


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