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BAE Systems to buy GPS business for $2bn

The defence giant has also agreed to acquire a tactical radios business
January 20, 2020

BAE Systems (BA.) will buy the military global positioning system (GPS) business belonging to Collins Aerospace, a subsidiary of US defence giant UTC (US:UTX), for $1.9bn (£1.5bn). BAE has also agreed to acquire Raytheon's (US:RTN) Airborne Tactical Radios business for $275m in cash.

IC TIP: Hold at 641p

The businesses were made available for acquisition as part of the regulatory process overseeing the merger of UTC and Raytheon, which is expected to close this year. BAE will fund its GPS purchase with fresh debt. It expects the business to generate revenues of around $359m in 2020.