BAE Systems Secures Regulatory Approvals for Acquisition of Ball Aerospace

Following the announcement made on August 17, 2023, BAE Systems has successfully secured the required regulatory approvals and is now poised to carry out the necessary steps to finalize the acquisition of Ball Aerospace from Ball Corporation. The anticipated completion of this transaction is expected in the coming days, with a purchase price set at $5.5 billion (approximately £4.4 billion). The funding for this acquisition will be sourced from existing cash reserves and new external debt.

For federal tax purposes, the transaction will be treated as an asset purchase, with an estimated net present value tax benefit of approximately $750 million. This positions the underlying economic consideration for the business at around $4.8 billion.

Ball Aerospace, renowned for its expertise in spacecraft, mission payloads, and optical and antenna systems, boasts decades of success driven by cutting-edge technologies. The company has established strong relationships with key players in the Intelligence Community, US Department of Defense, civilian space agencies, as well as major aerospace and defense primes. Operating in lucrative markets such as military and civil space, C4ISR, and missiles and munitions, Ball Aerospace is headquartered in Colorado and employs over 5,200 individuals, many of whom hold US security clearances.

The acquisition process will be carried out collaboratively by BAE Systems and Ball Corporation, culminating in the formation of a new business entity named Space & Mission Systems, to be incorporated within the Electronic Systems reporting segment.

Further details, including the impact of this acquisition on the 2024 Group guidance, will be provided by BAE Systems during the preliminary results announcement on February 21, 2024.

Charles Woodburn, Chief Executive of BAE Systems, expressed enthusiasm about the acquisition, stating, “Completing the acquisition of Ball Aerospace is an example of our strategy in action to grow our portfolio in advanced technology areas that meet our customers’ most urgent needs. We are eager to welcome the employees of Ball Aerospace to BAE Systems, expanding our presence in this critical space domain and strengthening our value compounding model of top-line growth, margin expansion, and high cash generation.”

However, it is important to note that this announcement contains forward-looking statements. These statements, aside from historical facts, involve inherent risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied by these forward-looking statements due to various factors. BAE Systems plc and its directors disclaim any liability to third parties concerning such forward-looking statements.

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