BAE Systems plc announced that it has entered into a definitive Asset Purchase Agreement to acquire Collins Aerospace’s Military Global Positioning System business for $1.925bn in cash, subject to customary closing adjustments.
The Company has also entered into a definitive Asset Purchase Agreement to acquire Raytheon’s Airborne Tactical Radios business for $275m in cash, subject to customary closing adjustments. Completion of both acquisitions are subject to successful closure of the Raytheon-United Technologies Corporation (UTC) merger, as well as customary regulatory approvals and conditions.
“These assets have come to market as part of the regulatory process relating to the merger of Raytheon and UTC. Both businesses are highly complementary to our U. S.-based Electronic Systems business and on completion they would be integrated into our Electronic Systems division. Both businesses have strong growth outlooks driven by close alignment with the priorities outlined in the US National Defense Strategy, Congressional mandates to upgrade existing capabilities and a presence on a substantial installed base of products and platforms in the U. S. and with allied nations. Both transactions would be expected to be immediately earnings and cash accretive,” a company statement said.
“These proposed acquisitions present a unique opportunity to add high quality, technology focused businesses to our Electronic Systems sector,” Charles Woodburn, chief executive of BAE Systems said (photo above), commenting on the announcement. “It’s rare that two businesses of this quality, with such strong growth prospects and close fit to our portfolio, become available. The strategic and financial rationale is strong and these proposed acquisitions, which are focused on areas of highest priority defence spending, will further enhance the Group’s opportunity for continued growth in Electronic Systems. We look forward to welcoming the employees of the two businesses to the Company, as we work together to help drive our business forward successfully.”