Jul 25, 2019

Advent to buy Cobham for £4 billion, setting up potential regulatory scrutiny

Advent International has agreed to buy Cobham (LSE: COB), a British defense and aerospace group known for developing air-to-air refueling technology. The deal is valued at £4 billion, or 165 pence per share ⁠— 35% premium to yesterday's closing price.

Why it matters: The deal could come under severe political and regulatory scrutiny in the U.K., just as Boris Johnson takes over as prime minister. Expect particular focus on possible layoffs and broader defense manufacturing sector impact, similar to debate last year when Melrose Industries bought GKN.

On the other hand: This is yet another example of how the pending Brexit hasn't scared off many U.S. investors.

The bottom line: "Cobham, which employs 10,000 people and also makes electronic warfare systems and communications for military vehicles, was shaken by a string of profit warnings in 2016 and 2017, forcing it to raise cash from shareholders. CEO David Lockwood embarked on a turnaround strategy two and half years ago, focused on improving the company’s financial and operating performance." — Paul Sandle, Reuters.

Go deeper: Everything you need to know about Brexit

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Boris Johnson forms "war cabinet" to prepare for no-deal Brexit

Britain's Prime Minister Boris Johnson. Photo: Lorne Campbell/WPA Pool/Getty Images

Boris Johnson, the United Kingdom's newly installed prime minister, has set up a "war cabinet" to deliver Britain's exit from the European Union "by any means necessary" by Oct. 31, the Sunday Times first reported.

The big picture: The EU says it won't renegotiate the Brexit withdrawal treaty agreed to by former Prime Minister Theresa May, per AP. Michael Gove, tasked by Johnson to "turbo-charge" no-deal Brexit plans, wrote in the Sunday Times that the U.K. government is now "working on the assumption" of a no-deal Brexit.

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Keep ReadingArrowJul 28, 2019

Bolton: Trump administration enthusiastically backs no-deal Brexit

National Security Adviser John Bolton addresses journalists in London Monday. Photo: Peter Nicholls/Reuters

The Trump administration supports a no-deal Brexit and Britain is "first in line" for a trade deal with the U.S., National Security Adviser John Bolton told reporters after meeting with U.K. Prime Minister Boris Johnson, the BBC reports.

"To be clear, in the Trump administration, Britain's constantly at the front of the trade queue, or line as we say. We want to move very quickly. We wish we could have moved further along in this with the prior government."
Go deeperArrowAug 13, 2019

Pelosi rules out U.K. trade deal if Brexit creates hard border with Ireland

Nancy Pelosi speaks at a reception hosted by Irish Taoiseach Leo Varadkar in the State Apartments in Dublin Castle. Photo: Iain White/Pool/Getty Images

House Speaker Nancy Pelosi said in a statement Wednesday that there is "no chance" of a U.S.-U.K. trade deal passing Congress if Brexit violates the terms of the Good Friday Agreement, which helped bring peace to Northern Ireland in 1998 by creating a seamless Irish border.

The big picture: Pelosi's statement is in response to comments made by national security adviser John Bolton, who said this week that the Trump administration enthusiastically supports a no-deal Brexit and that the U.K. is "first in line" for a trade deal with the U.S. If Prime Minister Boris Johnson takes the U.K. out of the EU without a deal on Oct. 31, as is the legal default, customs checkpoints would theoretically need to be erected along the Irish border — risking a flareup of sectarian violence.

Go deeperArrowAug 14, 2019