BAE Systems announced 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 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 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.
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 US regulatory approvals. Upon closure, both business lines would be integrated into the company’s electronic systems sector.
“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.”
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 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.
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.
