BAE Systems Plc snapped up more than $2 billion in U.S. defense-technology assets that Raytheon Inc. and United Technologies Corp. were forced to sell in order to gain antitrust approval for their merger.
Europe’s biggest defense firm will buy the military global positioning system arm of UTC’s Collins Aerospace unit for $1.93 billion, together with Raytheon’s airborne tactical radios operation at a cost of $275 million, it said Monday.
The assets came to market following regulatory scrutiny of the Raytheon-UTC merger and the acquisitions are subject to successful closure of that deal, according to a statement from London-based BAE, which said both businesses are focused on areas of highest-priority U.S. defense spending.
“It’s rare that two businesses of this quality, with such strong growth prospects and close fit to our portfolio, become available,” BAE Chief Executive Officer Charles Woodburn said in the release, adding that they’ll be folded into the group’s electronics-systems sector.
BAE shares rose as much as 3.4% and were trading 2.9% higher at 642.60 pence as of 8:31 a.m. in London. The stock is already up 14% this year following a 23% gain in 2019.
The Collins GPS unit is based in Cedar Rapids, Iowa, employs about 675 people and is expected to post adjusted earnings of $127 million on $359m in sales this year, BAE said. The Raytheon radios operation has 100 staff at facilities in Indiana and Florida, with sales of around $125 million last year.
By Christopher Jasper