BAE Systems wraps up acquisition of Ball Aerospace to expand space and defense offerings

BAE Systems (LON: BA) has announced the successful completion of its acquisition of Ball Aerospace from Ball Corporation, a move that significantly enhances BAE Systems‘ portfolio with leading space, science, and defense capabilities. The acquisition introduces a new sector within BAE Systems, named Space & Mission Systems, marking a pivotal expansion for the company and adding over 5,200 U.S. employees dedicated to mission-focused innovation and operational excellence.

Strategic Acquisition for Enhanced Capabilities

The acquisition of Ball Aerospace not only diversifies BAE Systems’ offerings but also aligns with its strategy to grow and advance its technology and innovation portfolio, especially in areas prioritized by the U.S. National Defense and Intelligence Strategies. Tom Arseneault, president and CEO of BAE Systems, Inc., emphasized the strategic significance of the acquisition, stating, “This acquisition underpins our strategy to deliver growth and advance our technology and innovation portfolio in high-priority areas.” Dr. Dave Kaufman, a seasoned leader within Ball Corporation and now at the helm of Space & Mission Systems, expressed enthusiasm for joining BAE Systems, highlighting the synergy and cultural fit between the two organizations.

BAE Systems Acquires Ball Aerospace, Bolstering Space and Defense Capabilities

Financial and Legal Advisors

The completion of this deal, valued at $5.6 billion—representing a 19.6x multiple of Ball Aerospace’s last twelve months (LTM) comparable EBITDA as of June 30, 2023—follows the receipt of all necessary regulatory approvals. Citigroup and Bank of America served as financial advisors, KPMG as accounting advisor, Kirkland & Ellis LLP as transaction counsel, and Covington & Burling LLP as CFIUS counsel for BAE Systems, ensuring a seamless transaction process.

Future Growth and Innovation

The merger with Ball Aerospace provides BAE Systems a robust platform to accelerate its U.S. space strategy and continue delivering across its extensive portfolio of programs. Dr. Kaufman is poised to lead the Space & Mission Systems sector, leveraging the combined capabilities to develop and deliver state-of-the-art space, science, and defense solutions. This strategic move promises to enhance BAE Systems’ ability to support critical missions and foster innovation in the aerospace and defense industry.

Ball Corporation’s Strategic Divestiture

The divestiture of its aerospace division allows Ball Corporation to focus on its core packaging business, utilizing the after-tax proceeds of approximately $4.5 billion and strong free cash flow to reduce net debt and enhance shareholder value through dividends and share buybacks. John Fisher, CEO of Ball Corporation, highlighted the company’s commitment to promoting circular aluminum packaging and organic growth across its global packaging operations, emphasizing sustainable and eco-friendly initiatives.