THE government is “closely monitoring” the bid by Dorset defence giant Cobham to take over another engineering firm has two sites in the county.

Ultra Electronics said last week that it was “minded” to accept a £2.6billion takeover offer from the Wimborne-based defence and engineering business.

Ultra has staff at Ferndown and Weymouth.

A government spokesperson said: “The government is aware of the proposed purchase of Ultra Electronics Holding Plc by Cobham Limited.

“While this is a commercial matter for the companies involved, we are closely monitoring the transaction.”

Cobham was itself taken over by the American private equity firm Advent International in a controversial £4billion deal which was completed at the start of 2020.

That deal was opposed by opposition politicians and relatives of founder Sir Alan Cobham, but was approved by government.

Advent subsequently sold off parts of the business, including Cobham Aviation Services UK at Bournemouth Airport, which was bought by Draken International.

The decision to monitor the proposed sale of Ultra Electronics comes under a different business secretary, Kwasi Kwarteng.

The government can intervene in mergers on public interest grounds including national security.

Ultra’s board said last week that it would recommend approval of an offer from Cobham of £35 per share, valuing the business at around £2.58bn. Cobham had offered £28 per share on June 29, Ultra said.

“Having considered the proposal, the board has indicated to Cobham that it is at a value the board would be minded to recommend to Ultra shareholders, subject to consideration and satisfactory resolution of other terms and arrangements, including the establishment of safeguards for the interests of Ultra's stakeholder groups," it added.

“In relation to this, Cobham has indicated to the board that it is minded to offer the UK government appropriate undertakings in respect of national security.

“Accordingly, the board will engage in discussions with Cobham to explore the proposal in further detail.”

The National Security and Investment Act, due to come into force next year, will strengthen the government’s ability to investigate and intervene in takeovers and other deals.

Ultra's site at Innovation House on Ferndown Industrial Estate does work for the energy industry, while its base at Waverly House on Weymouth’s Granby Estate incorporates work for its maritime, energy and contract electronics manufacturing solutions (CEMS) businesses.