BAE Systems is completing the final steps in their acquisition of Ball Aerospace from Ball Corporation, having received the necessary regulatory approvals.
The transaction is expected to close at a purchase price of $5.5 billion, which will be funded through existing cash and new external debt, according to a news release.
The transaction will be treated as an asset purchase for federal tax purposes, with an expected net present value tax benefit of $750 million Canadian, making the underlying economic consideration for the business $4.8 billion Canadian.
“In recent years, we’ve said that we would seek out opportunities to grow our portfolio in advanced technology areas that meet our customers’ most urgent needs, and completing the acquisition of Ball Aerospace is an example of that strategy in action,” said Charles Woodburn, chief executive officer of BAE Systems. “We look forward to welcoming the employees of Ball Aerospace to BAE Systems, bringing one of industry’s most respected and capable businesses into the group. The addition of this quality, fast-growing technology-focused business will significantly expand our presence in this increasingly critical space domain and further enhances our value compounding model of top line growth, margin expansion and high cash generation.”
Ball Aerospace is a leading provider of spacecraft, mission payloads, and optical and antenna systems. The business has trusted relationships in the intelligence community, the U.S. Department of Defense, civilian space agencies, and with major aerospace and defense firms and is well positioned in highly attractive markets, including military and civil space, Command, Control, Communications, Computers Intelligence, Surveillance and Reconnaissance (C4ISR), and missiles and munitions.
The company is based in Colorado, with more than 5,200 employees, many of whom hold U.S. security clearances.
BAE Systems and Ball Corporation will be executing the plan to complete the acquisition in the coming days. The newly-acquired business will be called Space & Mission Systems and be part of the Electronic Systems reporting segment.
Headquartered in Falls Church, Virginia, BAE Systems employs approximately 35,000 across its major operations in the United States, United Kingdom, and Sweden, and generated 2022 sales of nearly $12.6 billion. The company opened a 278,000-square-foot engineering and manufacturing center in southwest Cedar Rapids in November 2022.
