BAE Systems to Acquire Collins Aerospace GPS, Raytheon’s Airborne Tactical Radios Businesses
ARLINGTON, Va. (BAE Systems PR) — BAE Systems, Inc. announced today it has reached definitive agreements for the proposed acquisitions of Collins Aerospace’s military Global Positioning System (GPS) business and Raytheon’s Airborne Tactical Radios (ATR) business.
These two high-performing businesses are being sold in connection with obtaining the required antitrust clearances for the previously announced pending merger between Raytheon and United Technologies Corporation (UTC).
The proposed acquisitions are structured as asset transactions with associated tax benefits, and they remain subject to customary closing adjustments. The asset purchase agreement for the Collins military GPS business calls for cash of $1.925 billion, with an expected tax benefit of approximately $365 million. For Raytheon’s ATR business, the purchase agreement calls for cash of $275 million, with an expected tax benefit of approximately $50 million.
“As militaries around the world increasingly operate in contested environments, the industry-leading, battle-tested products of these two businesses will complement and extend our existing portfolio of solutions we offer our customers,” said Jerry DeMuro, CEO of BAE Systems, Inc. “This unique opportunity to acquire critical radio and GPS capabilities strengthens our position as a leading provider of defense electronics and communications systems, and further supports our alignment with the modernization priorities of the U.S. military and its partners.”
These proposed acquisitions are subject to the successful closure of the Raytheon-UTC transaction, as well as the satisfaction of other customary closing conditions, including receipt of the required U.S. regulatory approvals. Upon closure, both business lines would be integrated into the company’s Electronic Systems sector.
“These are strong businesses with talented employees who share our focus on quality and technology innovation,” said Tom Arseneault, President and COO of BAE Systems, Inc. “We are confident of a smooth transition that will accelerate our future together and look forward to welcoming these new employees to the BAE Systems team once the transactions are approved.”
Collins’ Military GPS Business
Based in Cedar Rapids, Iowa, Collins’ military GPS business is a longstanding provider of mission critical military GPS receiver solutions and has been a pioneer in military GPS receiver markets for over 40 years. Today, it designs and produces advanced, hardened and secure GPS products to include M-Code, anti-jamming, and anti-spoofing technologies. The business has an installed base of over 1.5 million devices on approximately 280 platform types around the world, including ground, airborne, and weapon systems.
Given the requirement for ubiquitous, secure geo-positioning in contested battlefields, this technology offering will continue to be critical to the U.S. military and partners worldwide. For example, the business is currently developing the next generation of M-Code GPS technologies for the U.S. military, which will advance our collective position to address the priority growth area of precision guided munitions.
Raytheon’s Airborne Tactical Radios Business
Raytheon’s ATR business is a leading provider of airborne tactical radio solutions. Based in Fort Wayne, Indiana, and Largo, Florida, the ATR business designs, manufactures, and supplies a wide array of mission-critical communication systems to the U.S. Department of Defense, allied governments, and large defense aircraft manufacturers. The business has leveraged its innovative technologies to develop secure communications solutions that are installed on a broad range of military airborne platforms.
Coupled with the Electronic Systems sector of BAE Systems, Inc., Raytheon’s ATR business will enhance our positions in airborne communications with broad spectrum, multi-band, multi-channel radios including battle proven, robust, anti-jam, and encryption capabilities. The ATR business brings both complementary waveform expertise and a long trusted partnership with the U.S. Army.
These businesses will be excellent strategic fits with the strong BAE Systems Electronic Systems sector, and our combined capabilities will benefit our customers and all of our stakeholders.
6 responses to “BAE Systems to Acquire Collins Aerospace GPS, Raytheon’s Airborne Tactical Radios Businesses”
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There goes the business sector selling out to overseas interests again.
There go veteran pieces of the U.S. MIC selling out to the European MIC. Meet the new boss, same as the old boss.
BAE already has a large presence in the US market. And the British parent company is about to become a bit less European. I wonder if buying into the GPS market is an attempt to offset an imminent loss of access to the EU’s Galileo system.
I don’t know much about Galileo but my understanding is that its architecture is much like that of GPS. So, unless there’s some arrangement analogous to the BBC’s annual license fee system for Brit TV viewers in order to get at the military-grade Galileo signal, there isn’t any way the EU could prevent the Brits, or anyone else, from using Galileo, militarily or otherwise.
The EU told the UK that if they left then they would lose military access to Galileo, which is a secured system. That was then. I don’t know if the EU tune has changed since. The UK also stands to lose contracts for developing and maintaining the system, a system that the UK has paid into to the tune of some serious bucks.
But BAE is Europe’s largest military contractor. They employ a lot of Europeans. They may have one or more subsidiaries domiciled in other EU countries, just as they have BAE Systems Inc. in the US. Such an arrangement may allow them to preserve their Galileo related business. I don’t know. In the end, these are political questions. BAE is about to find itself headquartered in Little England. On some level, this must be seriously threatening their bottom line.
On a side note, BAE’s nuclear submarine works, and the UK’s only nuclear submarine base, are in Scotland, which may break from the UK in order to join the EU. And the Scots have always been a bit cranky about the nukes. England may find itself stacking trident missiles in a shed in Portsmouth, or shifting their subs to Kings Bay in Georgia.
One has to suspect that locking the UK out of military grade Galileo access on the grounds that it’s for EU members only is a bluff. Are Canada & the US locked out as well? Galileo isn’t even fully functional yet. The EU probably likes having GPS. And once Galileo is fully formed, redundant targeting systems are kinda nice. So, in summary, there’s a lot I don’t know (but I bet I know more than most leave voters know).
Given that all the relevant countries are also NATO members, I’m not sure the EU could make such a threat stick. I’m also given to understand that quite a bit of the Galileo hardware is actually made in the U.K. so that would present an additional complication anent the EU attempting to play hardball.
I don’t put a lot of credence in the idea that Scotland is going to secede from the U.K. and rejoin the EU. The Scots are perpetual whiners, but they’ve also had a number of opportunities to actually leave the U.K. and always fail to pull the trigger. The Remainsters have been working overtime for years to dream up ever more recondite disaster scenarios anent Brexit and none of their dark forebodings show any sign of coming to pass. In contrast, the EU seems far more likely to suffer additional defections.