Bae Systems (LSE:BA.)
Historical Stock Chart
2 Months : From Dec 2019 to Feb 2020
--BAE Systems is buying Collins Aerospace's GPS business for $1.93 billion and Raytheon's Radio Business for $275 million
--The units are being sold as part of the Raytheon-United Technologies merger
--BAE shares rose 2.7% in morning trading in London
By Matteo Castia
BAE Systems PLC (BA.LN) said Monday that it is expanding its electronics system business with assets being sold due to the upcoming merger of Raytheon Co. (RTN) and United Technologies Corp. (UTX).
BAE said it is buying Collins Aerospace's Military Global Positioning System and Raytheon's Airborne Tactical Radios businesses for a total of $2.2 billion.
The U.K. defense-and-aerospace company said the acquisitions are focused on areas of highest priority defense spending and will boost its growth in electronic systems.
The assets are being sold off by Raytheon and United Technologies as part of their $135 billion combination announced last June.
BAE shares at 0840 GMT were up 16.60 pence, or 2.7%, at 641.20 pence, leading the risers in London's FTSE 100.
The company said it will pay $1.93 billion for Collins Aerospace's GPS business and $275 million for Raytheon Co.'s radio business. Collins Aerospace is owned by United Technologies.
Both acquisitions are subject to the closure of the ongoing merger between Raytheon and United Technologies.
BAE said both businesses benefit from the current political and national security environment. Specifically, the company added that the U.S. Congress supports an upgrade to current GPS and radio capabilities, which represent key areas of U.S. and NATO defense spending.
BAE said that it expects both transactions to immediately add to earnings and cash with the GPS business generating return on investment within three years and the radio business within one year.
Write to Matteo Castia at firstname.lastname@example.org
(END) Dow Jones Newswires
January 20, 2020 04:19 ET (09:19 GMT)
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