Colorado-based Ball Corp. announced it has agreed to sell its aerospace business to BAE Systems in a $5.6 billion deal.

The sale is subject to regulatory approval and is expected to close in the first half of 2024.

Ball, a leading producer of aluminum packaging, launched Ball Aerospace near Boulder in the 1950s with a $35,000 cash investment from the son of a company co-founder and the help of former CU scientists.

Today, Ball Aerospace, which employs more than 5,250 people, is a significant provider of spacecraft, optical systems, and antenna systems, among other technologies, working with both military and civilian agencies.

In a call with investors on Aug. 17, CEO Daniel Fisher said the corporation began weighing options for the aerospace business earlier this year, ultimately resulting in the planned sale to BAE Systems.

The sale will help Ball reduce its debt and repay shareholders, while BAE will be able to leverage the business for national defense, intelligence and science hardware, software and space-based assets, according to a statement from Fisher.

BAE is in a position to invest in the aerospace business beyond Ball’s existing plans, Fisher said during the investor call. He added that the transaction strengthens Ball’s balance sheet and enables the corporation to fast-track work on its other initiatives.

“Our acceleration of low-carbon, best-value aluminum packaging initiatives in the years to come will stimulate organic growth across our global packaging operations and improve the world for future generations,” Fisher said in a news release. “Our innovative portfolio of aluminum cans, bottles and cups for single-serve, refill, reuse and recloseable applications has untapped potential, and we look forward to unlocking that value and delivering sustainable compounding shareholder growth now and beyond.”

Ball plans to focus on its aluminum packaging initiatives in beverage, personal care and household product industries following a successful sale, Fisher said.

Last year, net sales reached $13.4 billion, excluding aerospace, he said, with earnings before interest, taxes, depreciation and amortization sitting at $1.7 billion.

BAE Systems CEO Charles Woodburn said in a news release that the company is focused on high-priority areas of defense and intelligence spending.

“The proposed acquisition of Ball Aerospace is a unique opportunity to add a high-quality, fast-growing technology focused business with significant capabilities to our core business that is performing strongly and well positioned for sustained growth. It’s rare that a business of this quality, scale and complementary capabilities, with strong growth prospects and a close fit to our strategy, becomes available,” Woodburn said.