Foreign bidder vows to create more jobs at Inmarsat: As £5.6bn foreign buyout edges closer, MPs say it is a threat to national security
Britain’s leading satellite company was a step closer to falling into foreign hands last night after the buyer vowed to create more jobs and invest in the UK.
Californian group Viasat agreed to buy London-based Inmarsat for £5.6billion in November in a deal MPs fear could damage the country’s national security.
The Government has not yet given the takeover the green light, however, with ministers able to block the deal under the National Security and Investment Act.
Pledges: Californian group Viasat agreed to buy London-based Inmarsat for £5.6bn in November in a deal MPs fear could damage the country’s national security
But yesterday Viasat edged nearer to winning approval after it agreed legally binding undertakings with the Business Department that included jobs and research and development.
Viasat has promised to expand the number of highly skilled jobs in the UK, including those that design and develop satellites and ground stations.
The company has also vowed to increase R&D spending in Britain by 30 per cent and create a UK R&D centre of excellence.
Other promises include creating a UK board of directors with authority over important strategic decisions for the Inmarsat group and making London the headquarters for the combined company.
A source close to the Business Department said: ‘The economic undertakings have been accepted but the deal still needs regulatory approval.
‘The decision will not be rushed, given who Inmarsat’s customers are we are not going to compromise the UK’s national security concerns.’
The promises come after Viasat chief executive Rick Baldridge flew to London towards the end of January in an attempt to win political support for the takeover.
He met Business Secretary Kwasi Kwarteng in Westminster and George Freeman, the minister for science, research and innovation, at Inmarsat’s headquarters in London.
Rajeev Suri, Inmarsat chief executive, said: ‘With this agreement, the combination of Inmarsat and Viasat will result in more highly-skilled jobs and R&D investment in the UK than Inmarsat could achieve on a standalone basis.
‘This milestone is a great step for the UK.’
But others, including Tory MP and former defence minister Tobias Ellwood, were more cautious.
Mr Ellwood said: ‘This is another company being sold to the US. OK, it is to one of our allies but this is a critical communications firm.
‘If the UK is serious about becoming a dominant force in tech and cutting-edge science then we cannot keep selling firms like Inmarsat.’
Inmarsat is the largest provider of in-flight Wi-Fi for airlines and the leading provider of internet connections for ships.
The business has 14 satellites in orbit and plans to launch another seven in the future.
Customers include the British military and as a result the company is considered a ‘strategic’ sector by the Government.
It was founded in 1979 as a UN agency to help sailors to send SOS messages, and was the first international satellite operator to be privatised.
It was listed in 2005 and had been a stock market darling but after a sustained period of under-performance it was taken private in 2019 for £4.6billion by four buyout firms led by Apax and Warburg Pincus. It was put up for sale last year.
Viasat, a satellite broadband provider for the military and business, has 5,600 staff including nearly 200 in the UK in Farnborough, Aldershot and Cheltenham.