Business Secretary Kwasi Kwarteng urged to block Inmarsat deal as US buyer moves step closer to £5.6bn takeover
Business Secretary Kwasi Kwarteng is under mounting pressure to block the US takeover of Britain’s leading satellite company after the deal moved a step closer.
In a crucial vote, California-based Viasat won the approval of its shareholders for the £5.6billion buyout to go ahead.
Rick Baldridge, Viasat’s boss, hailed the step as an ‘important milestone’ and expects the sale to be finalised this year.
Intervention: Viasat’s £5.6bn deal for British satellite firm Inmarsat is facing calls for scrutiny
Viasat would take control of Inmarsat in a tie-up that Baldridge said will create a global satellite leader and accelerate both companies’ growth.
But the takeover is being investigated by Kwarteng, who intervened after calls from defence experts and MPs to block the sale.
Ministers have been handed sweeping powers under the National Security and Investment Act to look at tie-ups and investments in 17 sensitive sectors, and act where necessary.
Inmarsat is Britain’s leading satellite company and the largest provider of in-flight wifi for airlines and a major player in internet connections for ships.
It has 14 satellites in orbit and plans to launch another seven. Customers include the British military and, as a result, the company is considered a ‘strategic’ asset by the Government.
There are fears Inmarsat could suffer the same fate as aerospace group Cobham, which was carved up 18 months after it was bought by US private equity firm Advent.
Viasat has promised to boost research and development spending in the UK and create a UK board of directors to oversee key decisions. The global headquarters of the combined group would be in London.
But independent analyst Francis Tusa said Kwarteng’s move suggests there is enough ‘doubt’ over the implications.
He said: ‘If there is enough doubt, that says “no”.
‘The UK has to be open for business. But not at the expense of risking security. The days of the Government saying: “Go on, take it over, we don’t care”, are gone.
‘So the deal is a step closer as it were, but if whatever the deal is is suspect enough that the Government is not sure about it, then there is enough doubt.’
The Government is stepping up scrutiny of similar deals. Last month Kwarteng launched a probe into the Chinese takeover of Britain’s leading semiconductor maker Newport Wafer Fab.
It also comes after the founding family of defence giant Cobham raised the alarm over a slew of sensitive takeovers.
Lady Cobham, the daughter-in-law of founder Sir Alan Cobham, has warned against ‘auctioning off’ high-tech firms Ultra Electronics, Inmarsat and Meggitt in the wake of the invasion of Ukraine.
Others to oppose the takeover include Tory MP Tom Tugendhat, chairman of Parliament’s foreign affairs committee, and former defence minister Tobias Ellwood.
And former deputy prime minister Lord Heseltine yesterday said: ‘I am sceptical about the idea of high technology companies being sold without regard.’
Viasat said its takeover of Inmarsat will strengthen its contribution to UK defence and security.
A spokesman said: ‘We have committed to invest heavily in our UK business and to continue to create more high-quality jobs in the growing space sector, in support of the UK Government’s National Space Strategy.’