BAE Systems’ sale of aerospace unit attracts General Electric bid

AN AUCTION for BAE Systems aerospace unit has advanced to the second round and attracted bids from heavyweights including General Electric, Eaton and Honeywell International.

The companies are among a handful of suitors that put in a second round of bids for BAE’s platform solutions business by the deadline of 29 October, after the initial round in mid-September and management presentations in following weeks.

The unit could go for more than 10 times its earnings before interest, taxes, depreciation and amortisation of about $190m (£118m), putting the price tag at the higher end of the $1.6bn to $2bn range earlier expected by bankers and analysts.

BAE, Europe’s largest defence contractor, has also received bids from several private equity firms, the sources said, underscoring robust buyer interest at a time when air traffic is picking up after a deep slump lasting years.

Smaller strategic bidders have shown interest in parts of the business; but BAE intends to sell the unit in its entirety.

BAE has hired JPMorgan Chase & Co to sell the platform solutions business.