Space Commerce

BAE to Acquire Ball Aerospace for $5.55 Billion

By Douglas Messier
August 17, 2023
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BAE to Acquire Ball Aerospace for $5.55 Billion
Ball Aerospace
Image credit: Ball Aerospace & Technologies.

BAE Systems has reached an agreement to acquire Ball Corporation’s aerospace subsidiary for $5.55 billion in cash, the two companies announced on Thursday (August 17).

BAE is the United Kingdom’s largest defense company. Ball Aerospace & Technologies is a US-based manufacturer of spacecraft, payloads, optical systems, and antenna systems for commercial, civil and military space missions. Its parent company, Ball Corporation, is the world’s leading manufacturer of aluminum cans.

“The proposed acquisition of Ball Aerospace is a unique opportunity to add a high quality, fast growing technology focused business with significant capabilities to our core business that is performing strongly and well positioned for sustained growth,” BAE Systems CEO Charles Woodburn said in a press release. “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.

“The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence and Intelligence spending, strengthening our world class multi-domain portfolio and enhancing our value compounding model of top line growth, margin expansion and high cash generation,” Woodburn added.

BAE Systems praised Ball Aerospace’s strong backlog of orders, highly skilled workforce, and world-class facilities and capabilities.

“Ball Aerospace will add more than $2bn in annual revenues in the growing space domain, C4ISR and missile and munitions markets. The acquisition will provide our US business with a position in some of the fastest growing segments of the defence market and further increases our alignment to enduring customer priorities embodied in the US National Defense Strategy,” BAE Systems said in the announcement.

The companies said they expect the deal to close in the first half of 2024. However, the sale is subject to regulatory approval from the US and UK governments, so there are extra hurdles to clear first.

“The complementary cultural fit of Ball Aerospace and BAE Systems and their combined position as a pure play aerospace and technologies company will leverage Ball’s recent investments in talent and facilities located across the country and centered in Boulder, Broomfield and Westminster, Colorado, to provide a multi-dimensional platform for vital national defense, intelligence, and science hardware, software, and space-based assets,” Ball Chairman and CEO Daniel W. Fisher said in a press release.

“We thank the entire Ball Aerospace team for their hard work and celebrate their commitment to continue to deliver on critical missions,” Fisher added. “BAE Systems is well-positioned to invest in Ball Aerospace to elevate the combined business to new heights, generate significant value to critical mission partners, offer customers more affordable solutions and enable a safer world for all stakeholders benefitting from today’s agreement.”

Ball Corporation said it will use the proceeds from the sale to grow its primary business, reduce the company’s debt, and accelerate returns to shareholders via share repurchases and dividends.

“Following the successful closing of today’s transaction, Ball Corporation’s improved balance sheet strength and flexibility, highly cash generative packaging businesses and our team’s cost-efficient ownership mindset provide an excellent equation for increasing the return of value to shareholders, maximizing value from our existing operations, and investing in our future growth through the lens of EVA. Executing our strategy of enabling the greater use circular aluminum packaging on a global scale continues,” Fisher said.

Doug Messier

Douglas Messier is the founder of Parabolic Arc. He studied at George Washington University’s Space Policy Institute and is an alumnus of the International Space University.