BAE Systems to acquire Ball Aerospace for $5.5 billion

BAE Systems to acquire Ball Aerospace for $5.5 billion

Time Stamp: August 17, 2023 7:31 AM
Source Node: 2225179

WASHINGTON — BAE Systems, a defense and security conglomerate based in the United Kingdom, announced Aug. 17 it intends to acquire Ball Aerospace for $5.5 billion.

Ball Aerospace, based in Westminster, Colorado, is a manufacturer of spacecraft, components and other systems for military, civil and commercial space applications. 

The acquisition would give BAE Systems “strong growth potential in areas aligned with the U.S. intelligence community and Department of Defense’s highest priorities,” the company said in a statement. 

With $26 billion in annual revenues, BAE Systems has a significant U.S. presence. The U.S. government is now its largest customer. BAE’s U.S. subsidiary, headquartered in Falls Church, Virginia, supports large DoD programs in air, land, sea and cyber warfare.  

In the military space sector, BAE has a large GPS user equipment business.

“The proposed acquisition of Ball Aerospace is a unique opportunity,” said Charles Woodburn, chief Executive of BAE Systems. “It’s rare that a business of this quality, scale and complementary capabilities, with strong growth prospects and a close fit to our strategy, becomes available.”

Workforce with security clearances

Ball Aerospace’s $3 billion portfolio includes sensors, spacecraft, data services and components. Another $5 billion in Ball contracts booked were not yet added to the backlog, the company said in February.

Ball has 5,200 employees, and more than 60% hold U.S. security clearances.

Its military space business includes a contract to build satellites for the U.S. Space Force and the Space Development Agency.

BAE said Ball Aerospace is “well positioned in highly attractive markets, military and civil space, missiles and munitions.”

The acquisition is subject to customary regulatory approvals and conditions. BAE said the targeted completion date is in the first half of 2024. 

Vertical Research Partners, a financial advisory firm, said in a note to investors that news of the acquisition is no surprise as it had been rumored for the last couple of months, 

“Ball gives BAE significantly more exposure to the growing government space market,” VRP said.

 “The tricky part for BAE management remains ahead,” said the note from VRP. “Firstly we shall see what the regulatory response is from the U.S. Department of Justice, though the recent clearance of the Aerojet transaction bodes well.”

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