USA – Aluminum packaging producer, Ball Corporation has agreed to sell its aerospace business to BAE Systems for gross proceeds of US$5.6 billion.

The transaction, which is subject to regulatory approvals and customary closing conditions and adjustments, is projected to close in the first half of 2024.

Commenting on the announcement, Charles Woodburn, chief executive at BAE Systems, says: “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.

“The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defense 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.”

Ball details that the price represents 19.6x its Aerospace business’s comparable EBITDA (as of June 30, 2023).

The sell-off will create a high-margin global aluminum packaging leader enabling the acceleration of low-carbon, best-value aluminum packaging initiatives to enhance organic growth across global packaging operations.

Ball Corporation will utilize its share repurchase authorization programs and quarterly dividends to accelerate the return of value to shareholders.

The precise timing and amount of repurchases and the opportunity to increase the dividend payout will be determined based on market conditions, timing of receipt of proceeds and other factors.

“Following the successful closing of today’s transaction, Ball Corporation’s improved balance sheet strength and flexibility, highly cash-generative packaging businesses and our team’s cost-efficient ownership mindset provide an excellent equation for increasing the return of value to shareholders, maximizing value from our existing operations, and investing in our future growth through the lens of EVA,” explained Daniel W. Fisher, chairman and chief executive officer.

Fisher adds that Ball’s portfolio of aluminum cans, bottles and cups for single-serve, refill, reuse and reclosable applications has untapped potential, and the company looks forward to unlocking that value and delivering sustainable compounding shareholder growth.

Meanwhile, in October last year, Ball added two new sizes of its infinitely recyclable Ball Aluminum Cup to offer consumers a full portfolio of sustainable cup options.

The firm introduced 9-ounce and 12-ounce aluminum cup sizes to its portfolio consisting of existing 16-ounce, 20-ounce and 24-ounce cup offerings to meet the growing demands for sustainable cup options.

The Ball Aluminum Cup, which is offered to food service clients, now has a 90% recycled content rate, making it the beverage container in its category with the highest recycled content percentage, the packaging firm claimed.

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