Ball Corporation Explores Sale of its Aerospace Business

SEATTLE (Scrap Monster: Ball Corporation (BALL) announced last Friday that it was exploring the sale of its aerospace business. The aerospace business, which provides hardware such as antennas and sensors for aerospace and national defense purposes, is expected to be offloaded for over $5 billion dollars. 

This isn’t the first time in recent history that they have looked to divest from one of their business segments. Just last September, Ball Corporation successfully divested from the Russian market, selling its beverage packaging business in Russia to the Arnest Group for $530 million dollars. 

Ball Corporation is a global provider of sustainable packaging solutions for beverage, food, and household products. They specialize in manufacturing metal packaging, including aluminum cans and bottles, as well as plastic packaging and aerospace technologies. Headquartered in Westminster, Colorado, Ball Corporation can trace its roots back almost 150 years ago, when the Ball brothers bought the Wooden Jacket Can Company, a small manufacturing business in Buffalo, New York. Ball Corporation went public in 1972, being listed a year later on the New York Stock Exchange.

The sale of the company’s aerospace business is an important catalyst that could help boost the health of its balance sheet. Looking at Ball Corporation’s recent 10-K, we can see that the company is currently faced with a lot of debt. Specifically, the company has around $7.54 billion dollars worth of long term debt, coupled with around $1.4 billion dollars worth of short term debt. To make matters worse, the company is currently tight on cash, only holding $548 million dollars worth of cash and cash equivalents, a relatively small amount compared to their debt. 

The injection of cash provided by the sale of their aerospace business would help them pay off some of this short-term and long-term debt, putting the company in a healthier financial position.

In 2023, Ball Corporation spent $610,000 in corporate lobbying, with $460,000 of that spending occurring in April. In April, they specifically lobbied for the National Defense Authorization Act, 2024 (H.R. and S. Draft). This act focuses on authorizing defense-related activities and funding for the upcoming year. They lobbied for provisions under Title II, Research, Development, Test & Evaluation, and Title XVI, Space Activities, Strategic Programs, and Intelligence matters, covering areas such as defense research, space programs, and intelligence activities. Additionally, they lobbied for provisions under Title IV, Research, Development, Test & Evaluation, likely addressing funding and priorities for research and development efforts in the U.S. Air Force and U.S. Space Force programs. 

This corporate lobbying spend on defense issues is interesting, especially given their intentions to offload their aerospace business.

Courtesy: www.nasdaq.com