A top Tory MP has written to business secretary Kwasi Kwarteng calling for a national security review of Inmarsat’s £5.4bn takeover by US rival Viasat, on the basis that it will “diminish the UK’s sovereign capabilities” in the space sector.
Tom Tugendhat, the chairman of the foreign affairs select committee, has written to Kwarteng expressing the body’s concerns about selling “strategically important” UK companies to their overseas counterparts – including to what he terms “friendly countries such as the US.”
“Such transactions, while offering many benefits to the UK economy, also risk reducing the UK’s sovereign capabilities and making it reliant on other
countries for the provision of critical infrastructure,” Tugendhat wrote.
In the letter, the minister highlights the government’s ambition to “grow the UK as a leading space science and technology superpower”, but warns that the sale of Inmarsat to a foreign buyer will wipe away the UK’s lead in the “critically important” sector.
Tugendhat goes further and urges Kwarteng to review the transaction under the new National Security and Investment Act, a new piece of legislation due to come into force on January 4 that strengthens the government’s ability to scrutinise takeovers, on the basis of national security threats.
In a response sent on 8 December, Kwarteng replied and said that the government was considering the transaction “thoroughly.”
“We will continue to monitor the situation closely and will use our legislative powers if appropriate,” Kwarteng wrote in the letter, which was first reported by the Telegraph.
It comes as business minister Lord Martin Callanan wrote an open letter to British companies today in an effort to reassure them that the new enhanced powers to screen and block takeovers on national security grounds will be used on “only a small minority of acquisitions.”
“This is not about stifling investment, but about adapting to new threats. It cannot and will not be used for anything other than national security,” Callanan wrote in the letter.
“I want to reassure you that the vast majority of acquisitions will be unaffected by these powers,” he continued.
The new act’s approach will be similar to investment screening other countries such as the USA, Australia, Germany, and Canada, Callanan added.