BAE Systems, Inc. entered into an agreement to acquire Ball Aerospace & Technologies Corp from Ball Corporation (NYSE:BALL) for $5.5 billion on August 16, 2023. The acquisition will be funded by a combination of new external debt and existing cash resources. The agreement includes a termination fee of $100 million payable by BAE Systems, Inc. to Ball Aerospace's parent company in the event the transaction is terminated because certain required regulatory conditions are not met within the agreed timeframe. Ball Aerospace generated revenue of $1,977 million and EBIT of $170 million, and the business had gross assets of $1,152 million. BAE Systems and Ball Corporation will be executing the plan to complete the acquisition in the coming days. The newly acquired business will be called Space & Mission Systems.

Transaction completion is subject to customary regulatory approvals and conditions, including, the expiration or termination of the waiting period for the Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of the applicable regulatory approvals and clearances from the Defense Counterintelligence and Security Agency and the Committee on Foreign Investment in the United States, the expiration of the applicable notice period for the filing to be made with the U.S. Department of State, Directorate of Defense Trade Controls. The transaction has been approved by the Committee on Foreign Investment in the United States. On February 13, 2024, Ball Corporation received approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. As of February 14, 2024, BAE Systems has now received the necessary regulatory approvals. Transaction is expected to complete in the first half of 2024. The transaction will be accretive to margins and earnings per share in the first year post completion including run-rate cost synergies and accretive to cash flow per share in the first year. Net proceeds accelerate deleveraging, share repurchases and drive significant EVA accretion. An approximately $4.5 billion of after-tax proceeds from the projected aerospace sale will be used to immediately reduce debt by approximately $2 billion driving leverage to in the range of 2.7x net debt to comparable EBITDA and, approximately $2 billion of proceeds will be used to increase return of value to shareholders via share buybacks and pay dividends moving forward.

Morgan Stanley & Co. LLC acted as financial advisor to Ball Corporation. Shilpi Gupta, David R Clark, Victor Hollender, Michael E Leiter, Stuart D Levi, Nancy M Olson, David E Schwartz, David M Wagener, David P Wales and Joseph M Yaffe of Skadden, Arps, Slate, Meagher and Flom LLP and James W. Attridge and Nicholas E.O. Gaglio of Axinn, Veltrop & Harkrider LLP acted as legal advisors to Ball Corporation. Citigroup and Bank of America Securities Limited acted as financial advisors for BAE Systems plc. KPMG served as accounting advisor for BAE Systems. Sarkis Jebejian, Edward J. Lee, Steven Y. Li, Ian G. John, Peter M. McCormack, Paula Riedel, Seth Traxler, Kevin F. Jacobsen, Matthew Antinossi, J. Robert Fowler, John Kleinjan, H. Boyd Greene, Sara B. Zablotney, William Dong, Christie Alcala, Rebecca L. Fine, Michael Saretsky, Ian Craig and Lisa G. Esayian of Kirkland & Ellis acted as legal advisors to BAE Systems. Covington & Burling LLP served as CFIUS counsel for the transaction.

BAE Systems, Inc. completed the acquisition of Ball Aerospace & Technologies Corp from Ball Corporation (NYSE:BALL) on February 16, 2024.