The world’s largest supplier of beer cans is exploring a sale of its business that provides aerospace and national defense hardware, such as sensors and antennas. The divestment of the unit, which accounted for about 13% of Ball’s consolidated net sales in 2022, would allow the Westminster, Colorado-based company to focus more on its beverage packaging operations and trim its debt pile of about $9.7 billion. The sources said the company had launched an auction process for the unit and attracted interest from large defense companies, including BAE Systems Plc and Textron Inc TRX.N, and private equity firms. A deal needs to be more specific, the sources added.
Ball started as a family business 1880, selling tin cans for kerosene and glass mason jars. The company became more diversified in the 1950s and 1960s as it moved into computer components and, later, high-tech space systems. Ball Aerospace now builds spacecraft, satellites, instruments, and sensors that NASA and other agencies use to research astronomy and planetary science.
In its aerospace division, the company helps NASA map global water resources and track weather conditions. It also serves commercial clients. The company established the unit in the 1950s, and it flourished as it gained contracts from the government to support earth science, aerial exploration, and national security and intelligence programs.
During the second quarter, Ball Aerospace supported the completion of a critical design review for the Spectro-Photometer for the History of the Universe, Epoch of Reionization and Ices Explorer (SPHEREx) telescope and spacecraft, the first all-sky near-infrared spectral survey mission. It will produce four complete all-sky maps during its two-year mission to help scientists understand the nature of the universe.
The company has diverse customers, ranging from commercial satellite operators to defense contractors, the U.S. military, and the Department of Energy, the company said in its earnings statement on Thursday. The company said the military segment represented about 14% of its revenue last year, with the Air Force and other services making up the most significant portion of that business. The company said that the military is seeking to field advanced warfighting capability that will give its forces a real-time information advantage in increasingly contested and constantly changing environments.
Ball said the deteriorating political and economic situation in Russia and currency volatility impacted its long-lived assets and resulted in a non-cash impairment charge of $435 million to its Russian long-lived asset group in the second quarter. The company recorded a benefit to reduce the deferred tax liability on its regional investments, partially offset by a charge to settle a tax dispute in Uruguay.
