BAE Systems acquires Ball Aerospace for US$5.6B

21 Aug 2023 --- Aluminum packaging leader Ball Corporation is selling its aerospace business to BAE Systems for US$5.6 billion in cash, subject to regulatory approvals, expected to close in the first half of 2024. 

Commenting on the announcement, Charles Woodburn, chief executive at BAE Systems, says: “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.” 

“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 defense 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.”

Ball details that the price represents 19.6x its Aerospace business’s comparable EBITDA (as of June 30, 2023). The sell-off will create a high-margin global aluminum packaging leader enabling the acceleration of low-carbon, best-value aluminum packaging initiatives to enhance organic growth across global packaging operations. 

Strategic growth
Following the successful closing of the transaction, Ball Corporation aims to utilize improved balance sheet strength and flexibility, highly cash-generative packaging businesses and the team’s cost-efficient ownership mindset to increase the return of value to shareholders, maximizing value from existing operations, and investing in growth.Ball Aerospace will add over US$2 billion to BAE System annual revenues in the growing space domain, C4ISR and missile and munitions markets.

“Executing our strategy of enabling the greater use of circular aluminum packaging on a global scale continues. Our acceleration of low-carbon, best-value aluminum packaging initiatives in the years to come will stimulate organic growth across our global packaging operations and improve the world for future generations,” says Daniel W. Fisher, chairman and CEO. 

Fisher adds that Ball’s portfolio of aluminum cans, bottles and cups for single-serve, refill, reuse and reclosable applications has untapped potential, and the company looks forward to unlocking that value and delivering sustainable compounding shareholder growth.

BAE Systems highlights that the proposed acquisition represents an “exceptional opportunity” to strengthen its portfolio with significant scale and high-end technology capabilities. 

“Ball Aerospace will add more than US$2 billion 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 defense market and further increases our alignment to enduring customer priorities embodied in the US National Defense Strategy.” 

Edited by Radhika Sikaria