BAE's big deal
The business news that matters
Hello everyone and welcome to the latest Off to Lunch…
BAE Systems has agreed a deal to buy Ball Aerospace for $5.55 billion (£4.4 billion), the biggest acquisition by a UK company so far this year.
Ball Aerospace is a US company that makes sensors for satellites, space travel, and the military. Its technology is used for weather forecasting, tracking emissions and monitoring air pollution, among many other things. It is currently owned by Ball Corporation, a packaging group that makes cans and bottles for drinks. Ball Corporation had been looking to offload the aerospace business.
The deal will help to expand BAE’s business in the US, which is already significant. BAE is the UK’s biggest defence company and said earlier this month that it expected revenues and profits for 2023 to be higher than previously thought as it benefits from a rise in government military spending after Russia’s invasion of Ukraine and its contract to build the UK’s new Dreadnought nuclear submarines.
Shares in BAE have fallen 5 per cent on the back of the announcement about the takeover today, with some concern in the City about the price of the cash deal. However, BAE shares are still up significantly over the last five years, with the company valued at £29 billion…
Ball Aerospace is based in Colorado and has more than 5,200 employees, 60 per cent of who have US security clearance according to BAE.
Charles Woodburn, BAE’s chief executive, said:
"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. 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.”
You can find BAE’s statement on the deal here
Other stories that matter…
1. Jamie Oliver’s restaurant and media business is growing revenues and profits again after it was forced to close 22 restaurants across the UK in 2019. The chef and his wife Jules received dividends of £6.8 million from the business in 2022, accounts filed at Companies House show. A new restaurant - Jamie Oliver Catherine Street - is scheduled to open this Autumn. You can find more details in a story by The Guardian here. The full accounts are not online yet but will appear here
2. Lindus Health, a UK start-up trying to speed-up clinical trials for new drugs, has raised $18 million (£14.2 million) in new funding, including from billionaire venture capital investor Peter Thiel. Lindus offers to manage trials for pharmaceutical companies and medical organisations. TechCrunch story here
3. Judith McKenna, one of the most senior UK figures in the retail industry around the world, is retiring from her role as head of Walmart’s international business. Statement here and Retail Week story here. McKenna, who is from Middlesbrough, has worked for Walmart for 27 years. She worked for Asda when Walmart owned the supermarket chain but then moved to the US company’s head office in Bentonville, Arkansas.
4. The economist Tyler Cowen has written an interesting column for Bloomberg on how big technological breakthroughs don’t supercharge economic growth immediately but improve living standards by boosting economic growth over a sustained period of time, even decades. The hook for the column is artificial intelligence and what it could mean (he guesses it will boost US GDP growth by between one-quarter and one-half of a percentage point every year). But he also looks at the industrial revolution in the UK and how the impact was not immediate because of all the new infrastructure that was needed to support the advanced technology, ie railways needed to be built to transport the goods made in factories. Column here
5. Breakthroughs in solid-state battery technology by the likes of Toyota mean that a new generation of batteries for electric vehicles is likely to emerge faster than previously thought. That is according to executives at battery material businesses interviewed in a piece for the Financial Times, which you can read here
And finally…
England will play in a World Cup final on Sunday. The Lionesses have achieved what no England football team has done in the men or womens game since 1966. England will play Spain at Stadium Australia in Sydney. Kick-off is 11am on Sunday.
Owen Slot writes in The Times that this England team reminds him of the men’s rugby team that won the World Cup in the same stadium in 2003 because of their winning mentality. Piece here. Jonathan Liew has a similar view in The Guardian, describing England as “calm and dispassionate, clinical on the counterattack, relishing their role as spoilers and assassins”. Piece here. The Guardian also has a round-up of the media reaction in the UK and Australia following England’s semi-final victory over the hosts. You can find that here. On a more sombre note, Ed Warner notes in his latest Sport Inc newsletter that the Lionesses are still in dispute over pay. You can read that here
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Best
Graham