UK defense and security conglomerate BAE Systems has announced its plans to acquire Ball Aerospace for a sum of $5.5 billion. Ball Aerospace, which is based in Colorado, is widely recognized for its manufacturing of spacecraft, components, and systems utilized in military, civil, and commercial space operations.
BAE Systems views the acquisition as a strategic opportunity to expand its business in areas that align with the US intelligence community and the Department of Defense’s priorities. Armed with an impressive annual revenue of $26 billion, BAE Systems already possesses a strong foothold in the US market, with its largest customer being the US government. Its US subsidiary currently supports several major Department of Defense programs, ranging from air and land warfare to sea and cyber warfare. Moreover, BAE Systems also boasts a substantial GPS user equipment business within the military space industry.
In contrast, Ball Aerospace possesses a diverse portfolio valued at $3 billion, encompassing sensors, spacecraft, data services, and components. Remarkably, more than 60% of Ball Aerospace’s 5,200 employees hold security clearances from the United States. This acquisition would effectively enable BAE Systems to solidify its position in the military and civil space markets, in addition to bolstering its capabilities in missiles and munitions.
However, the completion of the acquisition is not guaranteed, as it is subject to regulatory approvals and conditions. BAE Systems aims to finalize the transaction by the first half of 2024. Financial advisory firm, Vertical Research Partners, has already predicted the acquisition, citing rumors that had been circulating for several months. The response from the US Department of Justice will play a crucial role in determining the fate of the acquisition, according to Vertical Research Partners. However, the recent clearance of a similar transaction is viewed as favorable for BAE Systems.
As the defense and security conglomerate BAE Systems sets its sights on acquiring Ball Aerospace, excitement grows within the industry. The acquisition would not only propel BAE Systems to new heights in the military and civil space markets but also provide it with enhanced capabilities in missiles and munitions. While challenges remain in terms of regulatory approvals, BAE Systems remains hopeful for a successful completion in the first half of 2024.
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