Business secretary Kwasi Kwarteng urged to intervene in Inmarsat deal

Inmarsat deal puts pressure on Kwasi: Business secretary urged to intervene in satellite firm’s £5.4bn takeover

Kwasi Kwarteng is facing calls to intervene in the £5.4billion takeover of British satellite specialist Inmarsat.

US rival Viasat has swooped on the London company just two years after it was sold to foreign private equity groups in a controversial £4.7billion deal.

In an attempt to win over regulators, Viasat has already said it intends to keep Inmarsat’s headquarters in the UK, plough investment into its British operations and create more jobs.

Life saving: Inmarsat's Sailor communications system is used in the Volvo Ocean Race (pictured)

Life saving: Inmarsat’s Sailor communications system is used in the Volvo Ocean Race (pictured)

Viasat, which briefly counted Priti Patel as a paid adviser before she became Home Secretary in 2019, has not yet said how long it intends its pledges to last for.

Inmarsat’s current owners Apax and Warburg Pincus – alongside two Canadian pensions giants – made similar promises when they bought the firm in 2019.

The Mail understands UK officials want to secure additional, firmer commitments to avoid the need to intervene.

The Business Department said it is ‘monitoring’ deal talks closely. But critics have hit back, urging Business Secretary Kwarteng to launch a full investigation to scrutinise the deal and whether it has implications for national security.

From SOS to tech success 

Inmarsat was founded in 1979 by a UN agency, the International Maritime Organisation, to help distressed sailors send SOS signals.

It now has 1,800 staff across the world, including around 860 at its headquarters in London.

Inmarsat is the largest provider of in-flight wifi for airlines. Its Sailor communications system is used in the Volvo Ocean Race . 

The firm’s technology is also used to track climate change and connect rural farmers to the internet.

Inmarsat’s technology is cutting-edge. It is the largest provider of in-flight wifi for airlines, and the top provider of internet connections for ships worldwide.

It has 14 satellites in orbit, and plans to launch another seven.

These are counted as critical national infrastructure.

Lord Sikka, who is also a trained accountant and a professor at the University of Sheffield, said the deal should be investigated.

He said: ‘If we want to build hi-tech companies then the Government needs to intervene. The US and France are happy to step in.

‘I think the real problem is that the Government doesn’t really have an industrial strategy, and if it had one it would be building up champions. 

‘Private equity firms do not have long-term interests, and that’s a tragedy for the country.’

Inmarsat was delisted from the London Stock Exchange after Apax, Warburg Pincus and Canadian pensions groups bought it in 2019. The private equity firms will still hold more than a third of Inmarsat when it is sold to Viasat.

But the swift sale has confirmed the worst fears of those who opposed the 2019 deal.

An industry source told the Mail that Inmarsat had been in talks with the Government for some time about the possibility of a sale because the industry is thought to be so ripe for deal making.

In July, Inmarsat chief executive Rajeev Suri said the company was in the ‘sweet spot’ for this expected mergers frenzy and that it was ‘likely to have many interested dance partners’.

Kwasi Kwarteng is facing calls to intervene in the £5.4bn takeover of British satellite specialist Inmarsat

Kwasi Kwarteng is facing calls to intervene in the £5.4bn takeover of British satellite specialist Inmarsat

Professor Malcolm Macdonald, a space technology expert at the University of Strathclyde, said: ‘It is disappointing to see yet another UK technology firm being acquired by a foreign rival. 

‘It is striking that the UK does not seem to be able to provide the business environment for such acquisitions to be in the opposite direction, and it does seem that the vector of transmission is very much via a private equity firm.’

In January more stringent legislation on foreign buyouts – the National Security and Investment Act – comes into force and will allow ministers to call in deals for companies that play a key role in Britain’s infrastructure and national security.

The debate over Inmarsat follows interventions into takeover approaches on fellow hi-tech firms Ultra Electronics, which makes sonobuoys for the navy, and aerospace components maker Meggitt.

Jonathan Sinnatt, a spokesman for Inmarsat, said: ‘The Inmarsat-Viasat combination is pro-UK and will bring added jobs and investment to the critical space sector.’

A Government spokesman said: ‘While we welcome the initial commitments both Inmarsat and Viasat are making to the UK, the Government will continue to monitor the proposed acquisition closely. 

‘The Business Secretary has powers under the Enterprise Act 2002 to intervene in acquisitions which raise public interest concerns.’

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