Kwasi Kwarteng has been urged to intervene in the £5.5billion takeover of Inmarsat. Tom Tugendhat, chairman of Parliament’s Foreign Affairs Committee, called on the Business Secretary to launch a national security review into the deal to buy the satellite telecommunications company.
Tugendhat told Kwarteng that Inmarsat’s sale to US rival Viasat could ‘diminish the UK’s sovereign capabilities’ in the ‘critically important’ sector.
Viasat swooped on the London-based company just two years after it was sold to foreign private equity groups including Warburg Pincus in a controversial £4.7billion deal.
Security fears: Business Secretary Kwasi Kwarteng has been urged to launch a review into the £5.5bn takeover of British satellite group Inmarsat
Inmarsat’s technology is the largest provider of in-flight Wi-Fi for airlines, as well as the top provider of internet connections for ships worldwide.
There are 14 satellites on orbit, and the company plans to launch an additional seven. They are considered critical infrastructure.
Tugendhat stated that the takeover rules which came into force on January 4th, 2018, should have been applied to this deal.
The National Security and Investment Act grants the Government power to examine and possibly block takeovers in strategic sectors.
Tugendhat said: ‘Such transactions, while offering many benefits to the UK economy, also risk reducing the UK’s sovereign capabilities.
‘We are concerned that the sale of Inmarsat overseas will diminish the UK’s sovereign capabilities in this critically important sector.’
Kwarteng, meanwhile, said the Government was ‘monitoring’ the deal, adding: ‘I can assure you that this transaction will be considered thoroughly.’
A Viasat spokesman said: ‘We have made a clear commitment to build on Inmarsat’s presence in the UK, uphold previous commitments made by Inmarsat’s owners, and grow the investment of the combined company in UK space communications.’