When Britain’s flagship sailed through the waters of the Mediterranean last month, it became the target of a Russian submarine monitoring activity in the region.
HMS Queen Elizabeth, the largest and most powerful warship built for the Royal Navy, led a Carrier Strike Group (CSG) to the Indo-Pacific.
The Russian predator — believed to be a diesel-powered attack submarine of the Black Sea Kilo-class fleet — spied on the nine-ship group as it passed through Cyprus.
Military Power: HMS Queen Elizabeth and the Carrier Strike Group
But it wasn’t long before the predator became prey as naval chiefs scrambled two Merlin Mk2 submarine fighter helicopters to drop high-tech sonobuoys into the water to listen for the signature sounds emitted by the submarine.
The devices relay signals to British aircraft and ships and are a vital part of the UK’s maritime defence.
They are also perhaps the best-known device that Ultra Electronics has made for the armed forces.
Along with sonobuoys, the sonar and radar systems are part of the Navy’s “eyes and ears,” watching out for torpedoes and other threats, while power and signature management systems keep ships hidden from adversaries.
Ultra’s tracking systems also direct cannons aboard Type 45 destroyers and help F-35B Lightning jets land vertically on the Queen Elizabeth. But the London firm is now being targeted by its own predator – US private equity giant Advent International.
Advent has proposed a £2.6 billion takeover of the British company, with Ultra’s board willing to accept the 3,500 pence per share offer.
The Americans came through Cobham, another British defense company that brought in £4 billion last year. And that deal is being held back by critics as one reason the buyout company should never get their hands on Ultra.
Kwasi Kwarteng, the company secretary, shows “an active interest” and has asked officials to monitor the situation. An intervention for reasons of national security is possible, if a formal offer is made.
Still, this is unlikely to comfort those familiar with Advent’s takeover of Cobham, which was allowed after security guarantees were given to ministers.
Within 18 months of swallowing the company, Advent Cobham broke i
in nine pieces and sold many of them. This is despite promises that it would be a long-term investor. It has led to calls from MPs, former ministers and military powers to Kwarteng to prevent Ultra from suffering the same fate.
They fear the company could be cynically stripped of assets and sold to the highest bidder, losing its crucial capabilities and expertise abroad.
Will Walker-Arnott, investment manager at asset manager Charles Stanley, told BBC Radio 4: “Let’s be honest, this is a private equity takeover of a major technology asset in the UK and it’s using Cobham as camouflage.”
Lord Heseltine, Defense Secretary under Margaret Thatcher, called for a “proper investigative process”, while former Defense Secretary Sir Gerald Howarth warned the takeover “touches the heart of Britain’s defense capabilities”. Admiral Lord West, the former head of the Royal Navy, advised not to give up the UK with sovereign capabilities in areas important to the nation’s security.
And yesterday, Shadow Secretary of the Armed Forces Stephen Morgan warned Secretary of Defense Ben Wallace about the deal.
In a letter, the MP, whose constituency of Portsmouth South includes one of the Navy’s main bases, added: “While there is a close and celebrated alliance between the US and the UK, these private equity buyouts and subsequent breaches threaten the innovation, growth and jobs that are critical to the UK economy and to the maintenance of our national defence. It is imperative that the government protect our British-building capabilities when it comes to defense and prevent the erosion of pioneering British companies essential to supporting our naval platforms.”
Founded in 1920, Ultra started out making headphones in West London. The company has been making its sonobuoys in Greenford since 1949 and now has around 1,700 employees in the UK.
The sonar and radar technologies keep British waters safe, along with aircraft carriers and nuclear submarines. And this expertise has made the company a partner for Western militaries. In addition, the technology is becoming increasingly critical as the UK and its allies confront mounting global threats.
The Queen Elizabeth’s encounter in the Mediterranean — four days after the destroyer HMS Defender confronted Russian ships in the Black Sea — was not an isolated incident. Russian activity in British waters has returned to levels not seen in nearly 20 years, and China’s rapid military build-up has left the country with more submarines than any other.
Post-Brexit Britain tries to project its naval power with new aircraft carriers. It means Ultra is in a prime position to take advantage of growing defense spending.
The formal offering of Advent is now seen as inevitable. It wants to merge Cobham and Ultra into a ‘world champion’. A Cobham spokesman said: “We have given assurances that appropriate commitments will be offered to the British government.”
Since the Mediterranean Incident, HMS Queen Elizabeth has guided the CSG through the Suez Canal to Singapore. However, the predator hunting Ultra is still very much on the loose.
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