BAE Systems to acquire Ball Aerospace in $5.6 billion deal

 

BELFAST — BAE Systems has announced plans to buy US space systems supplier Ball Aerospace from Ball Corporation, in a $5.6 billon cash acquisition, the UK’s largest defense company announced today.

BAE, which makes equipment including Eurofighter Typhoon fighter jets and Dreadnought-class ballistic missile submarines, said in a statement that it has “entered into a definitive Stock Purchase Agreement” to execute the deal, which is subject to “ customary closing adjustments.” BAE also noted that the “underlying economic consideration” for the Ball Aerospace business stands at an estimated $4.8 billion.

If regulators do not oppose the deal, the targeted completion date is “first half of 2024,” per the announcement. It includes a $100 million termination fee for BAE if the deal does not go through.

Ball Corporation trades primarily as a circular aluminum packaging firm, with Ball Aerospace known as a spacecraft, mission payloads, optical systems and antenna systems supplier — always something of an odd fit. But it hasn’t been unprofitable: Ball Corporation was named as the 54th largest defense company globally, according to the most recent Defense News top 100 list. The same report said the firm made $1.65 billion in defense revenue for 2022, more than the likes of well-known firms like Aerojet Rocketdyne, Sierra Nevada Corporation or Turkish Aerospace Industries.

BAE said that it sees “strong growth potential” from Ball Aerospace “aligned with” US intelligence agencies and DoD “highest priorities.” BAE’s multi-domain portfolio will also be strengthened by the acquisition, according to the buyer, because of Ball’s “attractive positioning and outlook” not just in military and civil space markets but also C4ISR and missile segments.

The UK manufacturer also identified Ball as an “excellent cultural fit” for the company with a “long and distinguished track record of innovation and product development,” while noting that the last five years had seen growth by Ball supported by increased investment in “world class facilities and capabilities.”

Ball Aerospace’s contribution to DoD programs includes providing electro-optical research, data analysis and software development for the NOVASTAR scientific and technical intelligence program, led by the US Air Force.

The company was also selected as a prime manufacturer for the National Air and Space Intelligence Center’s (NASIC) MEGASTAR program in 2019, to “conduct scientific and technical intelligence, spanning multiple mission areas,” according to company literature.

It previously manufactured the Space Based Space Surveillance (SBSS) Block 10 satellite, first launched for the US Air Force in 2010, to enable a full space situational awareness capability.