Bulletin: BAE Systems' Credit Metrics Can Accommodate Ball Aerospace Acquisition

This report does not constitute a rating action. LONDON (S&P Global Ratings) Aug. 18, 2023--S&P Global Ratings said today that BAE Systems PLC ?s recently announced acquisition of Ball Aerospace for $5.555 billion will complement the group?s revenue generation capacity and yield stronger profitability. Although BAE (BBB+/Stable/A-2) will issue new debt and use cash on the balance sheet to fund the acquisition, credit metrics will remain within our thresholds for the rating. Ball Aerospace will be acquired on a 100% owned and controlled basis, and fully consolidated into BAE?s financial statements. The acquisition is expected to close in the first half of 2024. Ball Aerospace is expected to generate revenue of just above £1.7 billion in 2023, and S&P expects

...August 18, 2023 This report does not constitute a rating action. LONDON (S&P Global Ratings) Aug. 18, 2023--S&P Global Ratings said today that BAE Systems PLC's recently announced acquisition of Ball Aerospace for $5.555 billion will complement the group's revenue generation capacity and yield stronger profitability. Although BAE (###+/Stable/A-2) will issue new debt and use cash on the balance sheet to fund the acquisition, credit metrics will remain within our thresholds for the rating. Ball Aerospace will be acquired on a 100% owned and controlled basis, and fully consolidated into BAE's financial statements. The acquisition is expected to close in the first half of 2024. Ball Aerospace is expected to generate revenue of just above ú1.7 billion in 2023, and S&P expects this to grow by about 8%-10% in 2024, and it operates at slightly higher EBITDA margins than the BAE Systems group does. We therefore assume the integration of Ball Aerospace will be slightly EBITDA-margin accretive to...

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