Chinese bid for Northern Aerospace fails amid security fears

 
Sebastian McCarthy
BRITAIN-EU-POLITICS
Defence secretary Gavin Williamson was thought to have halted the deal on grounds of national security (Source: Getty)

Chinese takeover attempts to buy a British defence company have fallen through, according to UK private equity firm Better Capital.

Approval has not been given for aircraft parts maker Northern Aerospace to be purchased by Derby-based Gardner Aerospace, a subsidiary of Chinese aerospace and mining firm Shaanxi Ligeance Mineral Resources.

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Fears around Chinese government levels of access to sensitive information put the £44m deal back on hold last month, and Britain’s competition regulator has denied approval for the sale to go through.

The UK Competition and Markets Authority (CMA), which now has until 13 July to submit a report on the competition and national security aspects of the proposed deal, launched a probe into the potential takeover in June.

In an update this morning Better Capital said: "Permission to complete the sale was not obtained from the Competition and Markets Authority by the revised contractual deadline, despite requests for such permission by both parties.

"Accordingly the proposed transaction has lapsed."

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The CMA said: "As required by the Public Interest Intervention Notice issued by the business secretary, the CMA is conducting a competition assessment of this proposed merger. We have not received anything from the companies to indicate they no longer plan to merge.

"The CMA is required to give its report to the Business Secretary on 13 July. As the Business Secretary is the decision maker in this case, the CMA is unable to comment on its assessment ahead of his decision and his publication of the CMA’s report."

Northern Aerospace, which is based in Country Durham and employs around 600 people, was set to be sold until opposition last month from business secretary Greg Clark, who allegedly stalled the selling of Northern Aerospace on the urgent advice of defence secretary Gavin Williamson.

Germany, the US and Canada are among a number of countries which have recently made high-profile takeover blocks as a result of security concerns around a string of acquisition attempts by Chinese companies across the world.

Last year the UK government toughened its attitude towards foreign buyout deals as it looked to have greater say over military and technology deals in efforts to prevent homegrown companies in sensitive industries from falling into foreign hands.

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