The takeover of the British defence firm Ultra Electronics by a US private equity company will be investigated on national security grounds, after the business minister, Kwasi Kwarteng, told the competition regulator to examine the deal. Warning that foreign investment “must not threaten national security”, Kwarteng tabled an order in parliament preventing Ultra from disclosing “sensitive information” to Cobham, the defence firm behind the £2.6bn takeover bid. He said Ultra would be prevented from passing on details of the “goods or services it provides to HM Government or HM Armed Forces”, while the Competition and Markets Authority (CMA) examined the deal. The official intervention notice came after pressure from Labour and trade unions to intervene in the takeover bid by Cobham, which is based in Dorset and which was itself bought last year by the US buyout house Advent for £4bn. Steve Turner, assistant general secretary of the trade union Unite, said: “The government’s action with regards to the sale of Ultra Electronics is significant and is a step in the right direction.” But he said the government must not “just talk tough” but should take steps to stop the sale to “overseas venture capitalists” of Ultra as well as the defence manufacturer Meggitt. Based in Coventry, Meggitt, which makes wheels and brakes for military fighter jets, is being pursued by two US aerospace companies, Parker Hannifin and TransDigm, and appears to be on the verge of a £7bn sale. “This is an issue of national security and it is to be hoped that the government has finally woken up to the threat to the UK’s sovereign defence capability, as well as to skills and jobs, posed by venture capitalists who are primarily motivated by short-term profits,” Turner said. The shadow business minister, Chi Onwurah, earlier called on the government to do more than make “weak and vague” noises about the prospective takeover of Ultra. Kwarteng, announcing the intervention on Twitter, said: “The UK is open for business, however foreign investment must not threaten our national security.” The government can intervene in takeovers for limited reasons, including media plurality, economic stability, the UK’s ability to fight pandemics and national security. In an official notice, the Department for Business, Energy and Industrial Strategy said the deal would be investigated by the CMA on national security grounds. Ultra Electronics is integral to the operations of the British armed forces, specialising in hi-tech systems that offer an advantage in the air, on land and at sea, through the detection of emerging threats. Its products include systems to help detect improvised explosive devices and intercept communications, used in Afghanistan. Cobham had sought to allay concerns about the deal by offering the UK government binding commitments. It said it would promise to protect sovereign defence capabilities, as well as funding of the company’s pension scheme and investment in the UK. It also promised to protect UK manufacturing jobs and invest in research. These pledges would be monitored through a “forum” with government officials. But Cobham acknowledged it could sell Ultra’s forensics and energy businesses, while “limited numbers” of jobs, mostly linked to the firm’s stock market listing, may be lost. Paul Myners, the former City minister, has cast doubt on the value of promises made by companies seeking to secure takeovers. “These things are not enforceable, they mean nothing and they’re normally time-limited,” he said. Should the takeovers of Ultra and Meggitt go ahead, it would extend a buying spree in 2021 in which overseas buyers, many of them US private equity firms, have targeted British business. American buyout specialists have spent nearly £25bn so far in 2021, compared with £28bn last year, £30bn in 2019 and nearly £15bn in 2018, according to the financial data provider Dealogic. US private equity firms have bought or approached a series of British companies, including the supermarkets Asda and Morrisons, the roadside assistance company the AA, the infrastructure firm John Laing and the insurer LV=, among others.