March 3, 2026
BAE Systems to buy Ball Aerospace for $5.5 billion

BAE Systems to buy Ball Aerospace for $5.5 billion

BAE Systems to buy Ball Aerospace for $5.5 billion – MarketWatch

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Last Updated: Aug. 17, 2023 at 5:25 a.m. ET First Published: Aug. 17, 2023 at 3:19 a.m. ET

Ball Corp. stock rallies after deal was announced

Technicians from Ball Aerospace inspecting a NASA aircraft in 2004. BAE Systems agreed to buy Ball Aerospace.

AFP via Getty Images

[]BAE Systems said Thursday it’s buying the aerospace business of Ball Corp for $5.55 billion, bolstering its capabilities in space systems and other defense technologies.

[]Ball Aerospace is a Westminster, Colo.-based company with more than 5,200 employees, of whom over 60% hold U.S. security clearances. It makes products including spacecraft, mission payloads, optical systems, and antenna systems.

[]This year BAE BA, -4.58% expects the company to earn $310 million before interest, tax, depreciation and amortization on revenue of $2.2 billion.

[]The purchase price is 13 times estimated EBITDA net a tax benefit of $750 million and cost synergies estimated to be $30 million a year.

[]BAE shares fell 4% in London trade.

[]“We have highlighted previously that capital allocation including acquisitions play an important role for BAE and so we are not surprised that an acquisition like this is happening. It is a theme that we expect to continue, not just with BAE Systems, but across the defense industry as players look to scale up their operations so that they can capitalize on the long term uptick for defense products,” said Jamie Murray, an analyst at Shore Capital.

[]The acquisition is likely to be one of the largest in the U.K. this year. “Whilst many companies in the U.K. are conserving cash, this acquisition is a vote of confidence for the defense industry,” said Murray.

[]Ball Corp. BALL, -1.80% said the purchase price is 19.6 times comparable EBITDA for the last 12 months, which it will use to help reduce debt to comparable EBITDA to 3, which it says is the low end of its long-term leverage range.

[]“As a result, the company will be well-positioned to accelerate capital return to shareholders via share repurchases and dividends over a lower average invested capital base,” said the company. It didn’t quantify those plans.

[]Ball, which expects the deal to close in the first half of 2024, said the deal will enable it to be a focused, high-margin global aluminum packaging leader.

[]Ball shares jumped 6% in premarket trade.

[]Ball stock has gained 7% this year, underperforming the 15% advance for the S&P 500.

Why is Palo Alto Networks reporting earnings Friday afternoon? The strange timing draws speculation.

[]Wall Street wonders why the cybersecurity company decided to report earnings and hold its conference call after the close of markets on a Friday.

[]Steven Goldstein is based in London and responsible for MarketWatch’s coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch’s economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.

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