UPDATE 1-Britain orders security investigation into Cobham-Advent deal

The $5 billion acquisition of British defense company Cobham by U.S. private equity firm Advent International could be blocked on national security grounds after the government ordered an investigation into the agreed deal.

Business minister Andrea Leadsom has issued a European intervention notice, calling for a report from the Competition and Markets Authority (CMA) by Oct. 29 to determine whether the deal should go ahead. Shareholders in the British aerospace and defense company approved the takeover on Monday.

"The CMA will now prepare a report on the national security aspects of the proposed transaction. This is a statutory process to ensure national security implications of a proposed sale are fully assessed," the business department said. Cobham, which employs 10,000 people to make its air-to-air refueling system and communications equipment for military vehicles, has a storied history but has faced difficulties in recent years.

The group issued a string of profit warnings in 2016 and 2017 that forced it to raise cash from shareholders, and some investors complained that the offer price of 165 pence per share was too low. Britain, hit by a weak pound due to the uncertainty over Brexit, is also scrutinizing the acquisition of satellite communications firm Inmarsat by another private equity led consortium, on the potential impact to national security.

Also Read: Cobham investors back takeover by U.S. private equity group Advent