Defence contractor BAE Systems buys US defence giant Ball Aerospace for £4.4bn

“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 BAE chief executive Charles Woodburn.

“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.”

It marks the end of a 70-year chapter in the history of Ball Corporation and Ball Aerospace.

The latter was set up after the Second World War to find new revenues for the Ball business, which was worried that it could lose relevance as refrigeration reduced demand for the food canning market which it traditionally relied upon.

Ball Aerospace went on to be involved in the space race and built components for the Hubble and James Webb space telescopes.

It also supplies parts for the US’s cutting-edge F-35 fighter jet, which is also in service in the UK.

Ball Corporation chief executive Daniel Fisher said: “Since 1956, generations of dedicated Ball Aerospace colleagues have transformed a business of humble beginnings into a thriving enterprise offering innovative capabilities in a world that needs rapid, scalable technology solutions.

“In recent years, the business has positioned itself to have an even greater contribution to customers’ missions and delivered fourfold growth and record levels of combined contracted and won-not-booked backlog.

“The complementary cultural fit of Ball Aerospace and BAE Systems and their combined position as a pure play aerospace and technologies company will leverage Ball’s recent investments in talent and facilities located across the country and centred in Boulder, Broomfield and Westminster, Colorado, to provide a multi-dimensional platform for vital national defence, intelligence, and science hardware, software and space-based assets.”

AJ Bell investment director Russ Mould said: “BAE Systems’ deal for US industrials firm Ball’s aerospace arm is a reminder there is more to the business than just being a maker of armaments.

“BAE is looking to expand in nascent sectors like space as well as build on its capabilities in electronics and this deal looks a decent fit in both areas.

“The only downside is the $5.6bn price tag which looks a touch on the expensive side and potentially explains the initial lukewarm reaction from shareholders to the deal. The cost will raise the pressure on the company to execute smartly on the integration process. Assuming it hits the targets it has outlined then it should be earnings accretive in the short term.

“The fact BAE has been able to carry out a transaction like this with a minimum of fuss is in itself testament to its improved fortunes.”