TWO British defence companies with staff in Dorset are a step closer to being taken over by foreign-backed firms.

The Wimborne-based Cobham Group, which is owned by US private equity house Advent, confirmed it has agreed a £2.57billion deal for Ultra Electronics.

And rival defence group Meggitt reaffirmed its plans to accept a £6.3bn bid from US business Parker-Hannifin. It said the stock market’s takeover panel would set a deadline on another rival, TransDigm, to make its own £7bn bid binding.

Bosses behind the Cobham bid for Ultra Electronics – which has sites in Ferndown and Weymouth – also said they would agree to binding commitments to the UK government, which has been looking into the deal.

Cobham said it “recognises the specific importance of Ultra’s contribution to the UK’s economy and national security”.

Following any deal being voted through by shareholders, Cobham said it would “engage proactively and collaboratively with HM Government to agree the detailed terms, duration, nature and form of these commitments, which would apply immediately from completion of the acquisition to protect the Ultra businesses and stakeholders following closing”.

Details would include safeguarding and supporting the UK’s national security, continuity of supply and critical capabilities in the UK, and national security clearance arrangements.

Ultra’s site at Innovation House on Ferndown Industrial Estate does work for the energy industry.

Its site at Waverly House on Weymouth’s Granby Estate incorporates work for its maritime, energy and contract electronics manufacturing solutions (CEMS) businesses.

Cobham to be bought by American group in £4billion deal

Cobham said it would protect existing jobs and invest in research and development to create new ones in UK manufacturing and engineering positions.

Ultra would also keep its headquarters in the UK, it added, and the government will have an “ongoing dialogue, co-operation and monitoring” position to ensure the commitments are upheld.

Business secretary Kwasi Kwarteng is said to have ordered officials to launch a national security investigation under the Enterprise Act.

The act gives the government the power to intervene in mergers on public interest grounds covering national security.

Cobham, which employs 10,000 people, is best known for technology enabling the mid-air refuelling of planes.

Under the deal, shareholders in Cobham would receive £35 a share in cash and a 16.2p-a-share dividend due next month.

Meggitt approves £6.3bn takeover by US firm Parker-Hannifin

The price is 63.1 per cent above Ultra’s closing price on June 24 before the first bid from Cobham – at £28 a share.

Cobham said the deal would help both businesses complement each other through design, engineering and manufacturing.

The board will now ask shareholders to vote on the deal and must secure the support of 75per cent.

Shonnel Malani, chairman of the Cobham Group, said: “We believe Cobham and Ultra’s complementary capabilities delivering mission critical technology will be significantly enhanced through the combination of the two groups, enabling the development of higher performance solutions for our customers.”

He added: “We look forward to working with HM Government, and other relevant stakeholders, to agree legally binding commitments which safeguard Ultra’s contribution to the UK economy and national security.”

Meggitt in new takeover bid from TransDigm

Tony Rice, chairman of Ultra, said: “The Ultra board has… spent considerable time reviewing the potential impact of Cobham’s ownership on Ultra’s stakeholders and is comfortable that their stakeholder commitments plus legally binding undertakings to HM Government will protect stakeholder interests appropriately.

“The Ultra board therefore unanimously intends to recommend the Cobham offer to shareholders.”

At Meggitt, the board said shareholders will be asked to vote on its proposed takeover on September 17 but suggested this could be delayed if TransDigm makes its own bid binding.

The business has its heat transfer division Heatric headquartered at Holton Heath, Poole.

Meggitt’s group headquarters moved from Bournemouth Airport to Coventry in 2020.