British defence company BAE Systems plans to acquire Ball Corporation’s aerospace subsidiary for US$5.6 billion in cash. The deal, pegged as one of the biggest acquisitions by a UK company this year, is also BAE’s biggest, making public the extent of its ambition to move into the US space sector.
Charles Woodburn, BAE Systems chief executive said: “The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence and Intelligence spending.” BAE said the acquisition would add over US$2 billion in annual revenues in the growing space market and help its US business.
Ball Aerospace, which recorded revenue of US$1.97 billion for 2022, produces space systems engineering products, telecommunications technology, and electro-optics and cryogenics materials for government and commercial customers. Its parent company said the price represented 19.6 times Ball Aerospace’s comparable EBITDA (earnings before interest, tax, depreciation and amortisation) for the 12 months to June 30, 2023). More than half of the 5,200 employees hold US security clearances.
BAE hopes to close the deal in the first half of 2024.
Comment by David Todd: As it tries to conquer America, BAE Systems is doing its best to get back into space – a very significant part of the defence and aerospace sectors which it should never have left. In 1994, when it was still called British Aerospace, the firm myopically sold its space systems division to Matra Marconi Space. This, in turn, became Astrium before becoming a successful part of Airbus Defence and Space. In 2021, BAE made its first, much smaller, move back into the space sector when it bought the In-Space Missions satellite innovation company.
