BAE Systems entered into a definitive stock purchase agreement to buy the Ball Aerospace business from Ball Corp. for $5.55 billion in cash.
The proposed stock transaction will be treated as an asset purchase for federal tax purposes, with an expected net present value tax benefit of $750 million. This makes the underlying economic consideration for the business $4.8 billion.
“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,” said Charles Woodburn, group CEO of BAE Systems plc. “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.”
Ball Aerospace is a unique opportunity to strengthen BAE Systems’ world-class multidomain portfolio, the company said.
“The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence 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,” Woodburn said.
The deal is still subject to customary closing adjustments.