The chief executive of the US satellite company that is buying Inmarsat for $7.3bn (£5.4bn) has said it is not “stealing” Britain’s crown jewel in the space communications race, and is confident the deal would be cleared by a potential investigation by the government to assess the threat of a foreign takeover to national security.
Rick Baldridge, the chief executive of Viasat, was in London with his team last week to meet government agencies, Inmarsat management and media as part of a mission to pave the way for clearance of the California-based company’s biggest ever deal.
“This is not a step-in-and-steal deal,” Baldridge said. “We have a longstanding relationship in the UK, we didn’t just come here for this deal. It isn’t about ripping out cost to make the numbers. I don’t think people here will see a lot of change.”
Baldridge, who says Viasat UK has had responsibility for encrypted classified UK information for years, pointed out that there were no issues raised with Inmarsat being taken private by a private equity consortium with a large proportion of non-UK based investors three years ago.
“Inmarsat has already been sold to private equity,” he said. “They are already 75% owned by non-UK based investors, probably more than that. We have had business over here in information security, primarily with the MoD, for over a decade.”
However, in the intervening years the geopolitical climate relating to the takeover of assets considered of national strategic importance has rapidly changed, with the takeover of firms such as Arm, a key global player in the semiconductor industry, to aerospace and defence businesses such as Meggitt and Ultra Electronics, all being assessed over the threat to national security.
Inmarsat – which was founded in 1979 and has its headquarters in London, floated in 2005 and has about 1,800 staff globally – is the global leader in providing communications for the maritime and aviation industries. Its technology was used in the hunt for the missing Malaysian Airlines flight MH370 in 2014, and it is a bidder for a £6bn contract to upgrade the Ministry of Defence’s secure communications network.
In January, the government gained beefed-up powers through the National Security and Investment Act introduced this month to potentially block some foreign takeovers. It is understood that about eight deals are provisionally being assessed for full scrutiny under the new enhanced regulatory powers.
“We have a very strong relationship with the MoD and space agency here,” Baldridge said. “In terms of a national security investigation, no one has to suggest it has to be done, [the government] are going to do an investigation, it is part of the process. It became law in January, we knew that at the time [of the takeover]. If they do the work, talk to the MoD, the space agency, they will see they have a long-term, good relationship with Viasat.”
Viasat, which employs about 200 staff in the UK of a total of 6,000 globally, has pledged to keep Inmarsat in London as its international headquarters.
“We have a fundamental independence strategy,” Baldridge said. “There is a great fit between the assets that they have and where our aspirations are. It is about putting two companies together to have them grow collectively. There will be some synergies but the real goal over the next five to 10 years is that we were going to have to come here to grow the business anyway. We care about financials but the main change you are going to see is investing.”
