£2.6bn bid to take business private may have national security issues

The takeover offer for global satellite communications firm Inmarsat has been referred to the UK Competition and Markets Authority on the grounds that the deal, which involves taking the company private, may have national security implications.

The takeover offer, made in March this year, is valued at £2.6bn ($3.4bn), but with debt included it totals some $6bn. The offer was made by a consortium called Triton Bidco, which comprises UK-based Apax Partners, US-based Warburg Pincus, and two Canadian pension funds – CPPIB and the Ontario Teachers’ Pension Plan Board.

A statement from the UK Competitions & Markets Authority said they are considering whether the acquisition of Inmarsat PLC by global buyout groups Apax and Warburg Pincus would reduce competition in the market. Alongside this, there is a concern that the deal may also raise national security issues for the UK. This is particularly as the deal would take Inmarsat private.

Under the UK’s Enterprise Act 2002, which was amended last year, the government can now more easily intervene in deals that it is felt might have national security implications. The deal is anticipated to be completed by the end of this year subject to how long the regulatory processes take.

All this comes at a time when Inmarsat is celebrating its 40th anniversary and also at a time when, through various initiatives, it is looking to grow its presence in the global marine leisure market.