The UK is closely examining a flurry of takeover bids for UK defence and aerospace companies from US companies to determine how they will affect national security, expertise and jobs. British security firm Ultra Electronic Holdings accepted a £2.57 billion ($3.53bn) buyout from US private-equity backed Cobham at the start of the week, while British defence contractor Meggitt is being pursued by two American groups, Parker-Hannifin and TransDigm Group. Business secretary Kwasi Kwarteng said he accepted takeovers in the defence sector are sensitive <a href="https://www.thenationalnews.com/world/2021/08/18/taliban-pledge-totally-different-moderate-face-as-west-continues-evacuations/" target="_blank">amid the situation in Afghanistan</a>, giving the UK government reason to monitor the takeover process and its effect on UK jobs, expertise and security. “That’s exactly what we are looking at,” Mr Kwarteng said. Prime Minister Boris Johnson’s government is under pressure over the deals after allowing previous takeovers in the defence sector to go ahead, such as the acquisition of Cobham by US private equity firm Advent International in January last year, despite opposition from senior industry figures. Cobham now has no UK manufacturing presence, with the company’s chairman Shonnel Malani saying his company will work with the UK government on binding commitments regarding Ultra’s contribution to national security, seeking to address one of the remaining hurdles to the transaction. Meanwhile the Meggitt deal has also raised red flags after the first takeover bid from Parker Hannifin, which had its offer of £6.3bn accepted by the board at the start of the month, only guaranteed jobs for one year despite the company pledging to be a “responsible steward”. Meggitt, which makes components and sub-systems such as brakes for more than 70,000 civil and military aircraft across the globe, has a quarter of its staff based in the UK across 39 sites. While Parker initially said it would offer legally binding commitments to secure the deal, such as retaining the company’s business headquarters in Britain, as well as maintaining all divisions and staff levels in R&D, product engineering and manufacturing arms, the company’s chief executive later backtracked by saying the promises were only valid for a year on some aspects of the deal. However, TransDigm Group, which makes aircraft components including ignition systems, pumps, actuators and controls, then joined the bidding for Meggitt just over a week ago. Its surprise counter offer of £9 a share was about 13 per cent higher than the £6.3 billion offer from Parker-Hannifin. While Cleveland-based TransDigm is offering more, a higher price will not be the deciding factor in a sale of the 170-year-old UK company. Meggitt is one of the few remaining UK-based civil aerospace and defence companies, with its directors continuing to favour the Parker bid, citing considerations such as the effect on employees and the UK government, whose consent will be pivotal in any deal. Meggitt said it will weigh the new proposal, although “Parker’s offer continues to represent an attractive proposition for Meggitt’s shareholders and for its broader stakeholders". The prospect of a bidding war underscores the flurry of consolidation involving aerospace suppliers, which are still suffering from the effects of last year’s market collapse. Mr Kwarteng said government ministers are unable to intervene in the takeover process under the Enterprise Act until bids are formally lodged. Without specifically naming Ultra, he said: “I’ll be looking very shortly at the evidence and the papers and see whether things are public interest or not.” Labour’s Shadow Business Minister Chi Onwurah said the government is “making weak and vague noises” to protect Ultra. “Serious questions remain about potential threats to national security, the business model of the new owners, and future governance and operational freedoms,” he said.