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For some time now there has been a growing air of confidence around BAE Systems.

That was underlined when, earlier this year, the UK’s biggest defence contractor reported a record order book.

And it was further emphasised when, today, BAE announced it is spending $5.55bn (£4.35bn) on the aerospace division of the US packaging giant Ball Corporation.

The deal, described by BAE as a “unique opportunity to strengthen BAE Systems’ world class multi-domain portfolio”, is the biggest acquisition this year by a British company.

The Ball Corporation is a specialist supplier of satellite systems, geospatial intelligence, tactical solutions and antenna arrays.

The acquisition of its aerospace arm takes BAE more deeply into both the space sector and into what, in defence industry jargon, is described as ‘C4ISR’ – command, control, communications, computers, intelligence, surveillance and reconnaissance.

Ball, the world’s biggest maker of aluminium drink cans, put the business up for sale earlier this year as it seeks to focus on packaging and to reduce its $9.7bn debt pile – which is partly a legacy of its £4.5bn takeover of Rexam, the former FTSE-100 packaging group, in June 2016.

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In November Sir Simon Lister discussed BAE’s Royal Navy contract to build five ships in Govan, Glasgow

Rivals beaten by BAE

BAE faced stiff competition to buy the business.

Private equity companies Blackstone and Veritas Capital were both in the running, as were other defence contractors, including the $61bn US giant General Dynamics and Textron, whose products include Cessna aircraft.

Charles Woodburn, the BAE chief executive, said the business – which BAE had not expected to become available – would be an “excellent addition” to BAE’s portfolio and an “excellent strategic fit”.

He added: “This is a significant and exciting day for BAE Systems.”

Mr Woodburn said Ball Aerospace was expected to grow its sales by 10% a year during the next five years and that it was also expected to add to BAE’s profits during the first year following the deal.

Ball Aerospace has already doubled its sales during the last five years and BAE expects those sales – which were $1.98bn in 2022 – to hit some $4bn by the end of the decade.

Mr Woodburn added: “We are making this acquisition from a position of strength. Ball Aerospace hits the mark in terms of a number of our strategic priorities… [including] defence, intelligence and scientific missions.”

Why BAE bought Ball Aerospace

Mr Woodburn outlined several reasons for buying Colorado-based Ball Aerospace.

The first is that the space sector is a market of growing importance to BAE’s customers. It will also deepen BAE’s relationship with the likes of NASA – one of Ball Aerospace’s key customers.

The second is the growing importance to BAE’s customers of environmental monitoring and surveillance as they seek to respond to climate change.

Ball Aerospace, which employs more than 5,200 people, is a key supplier of advanced remote sensing and other scientific systems and analytic tools and expertise.

It also enjoys a strong relationship with the National Oceanic and Atmospheric Administration, the US government body that provides daily weather forecasts, storm warnings and climate monitoring.

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The third reason is the war in Ukraine.

Tom Arseneault, who heads BAE’s US arm BAE Systems Inc, said the war had led to a surprisingly rapid drawdown of munitions that was forcing governments to spend more in areas such as that serviced by Ball’s tactical solutions business, which supplies stealth cameras and antennas used on land and sea, and in air and space.

He said the company was optimistic about the regulatory process – a key point given that the US government, under first Barack Obama and then Donald Trump, has become increasingly sensitive in recent years about allowing the acquisition of strategic businesses by overseas buyers.

The deal means the US will now account for just under half of BAE’s global sales.

The Prince of Wales talks to BAE Systems apprentice Charlotte and Typhoon delivery director Martin Topping in the BAE Systems Typhoon Maintenance Facility during a visit to RAF Coningsby, Lincolnshire, to learn about future technological innovations and open a new boxing club. Picture date: Friday November 18, 2022.
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The Prince of Wales talks to BAE Systems apprentice Charlotte and Typhoon delivery director Martin Topping during a visit to RAF Coningsby, Lincolnshire

Debt fears cause shares to fall

Shares of BAE fell by just over 5% on the news amid concerns that BAE’s debt will increase following the takeover.

Some analysts also expressed concerns that Ball Aerospace’s profit margins are slightly below those enjoyed by BAE’s electronic systems arm.

BAE’s margin is between 15-17% while Ball’s margins are between 10-12%.

But Mr Arseneault dismissed that, arguing that synergies between the two businesses would in time bring Ball Aerospace’s margins higher.

He added: “As part of a company with like supply chains, similar customers and… the ability of the teams to leverage each other’s connections and buying power will… underpin margin improvement.”

That pledge probably stacks up given BAE’s recent history.

As Mr Woodburn noted, BAE has a track record during the last few years of improving margins in its electronic systems business, while more broadly it also has a solid track record in integrating acquisitions in this field.

Following the blockbuster merger between US defence giants United Technologies and Raytheon in 2019, US regulators forced the enlarged company to offload a number of businesses, two of which were subsequently snapped up by BAE.

These were successfully integrated into BAE’s electronic systems business despite the disruption posed when the pandemic erupted shortly afterwards.

The bigger picture is that, while many people associate BAE with military hardware such as jet fighters, tanks, submarines and torpedoes – all of which remain important parts of what it does – the company has been evolving over recent years.

Products and services in electronic systems, cyber security and intelligence are an increasingly crucial part of what it offers customers.

The war in Ukraine has highlighted, in particular, the importance of satellite technology.

The way warfare is conducted is changing – and this deal underlines how this important British business is responding.

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Hundreds of jobs at risk as River Island takes axe to store base

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Hundreds of jobs at risk as River Island takes axe to store base

Hundreds more high street jobs are being put at risk as part of a sweeping overhaul of the family-owned fashion retailer River Island.

Sky News has learnt that the clothing chain, which trades from about 230 stores, is proposing to close 33 shops in a restructuring plan which will be put to creditors in August.

The fate of a further 70 stores is dependent upon agreements being reached with landlords to slash rent payments.

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Confirmation of the plans comes less than a month after Sky News revealed that the company, which was founded in 1948 by Bernard Lewis, was working with PricewaterhouseCoopers (PwC) on a restructuring plan.

In a statement issued on Friday, Ben Lewis, River Island’s chief executive, said: “River Island is a much-loved retailer, with a decades-long history on the British high street.

“However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers’ needs.

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“The sharp rise in the cost of doing business over the last few years has only added to the financial burden.

“We have a clear strategy to transform the business to ensure its long-term viability.

“Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results, but it is only with a restructuring plan that we will be able to see this strategy through and secure River Island’s future as a profitable retail business.

“We regret any job losses as a result of store closures, and we will try to keep these to a minimum.”

The company declined to comment on how many jobs would be put at risk by the initial 33 shop closures, or on the scale of the rent cuts being sought during talks with landlords.

In total, it is understood to employ about 5,500 people.

Sources said that new funding will be injected into River Island if the restructuring plan is approved in August.

Previously named Lewis and Chelsea Girl, the business, it adopting its current brand during the 1980s.

Accounts for River Island Clothing Co for the 52 weeks ended 30 December 2023 show the company made a £33.2m pre-tax loss.

Turnover during the year fell by more than 19% to £578.1m.

A restructuring plan is a court-supervised process which enables companies facing financial difficulties to compromise creditors such as landlords in order to avoid insolvency proceedings.

An identical process is being used to close scores of Poundland shops and slash rents at hundreds more.

In its latest accounts at Companies House, River Island Holdings Limited warned of a multitude of financial and operational risks to its business.

“The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition especially in the digital space,” it said.

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“The key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.

“A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence.”

Retailers have complained bitterly about the impact of tax changes announced by Rachel Reeves, the chancellor, in last autumn’s Budget.

Since then, a cluster of well-known chains, including Lakeland and The Original Factory Shop, have been forced to seek new owners.

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Post Office Capture scandal: Sir Alan Bates calls for those responsible for wrongful convictions to be ‘brought to account’

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Post Office Capture scandal: Sir Alan Bates calls for those responsible for wrongful convictions to be 'brought to account'

Sir Alan Bates has called for those responsible for the wrongful convictions of sub postmasters in the Capture IT scandal to be “brought to account”.

It comes after Sky News unearthed a report showing Post Office lawyers knew of faults in the software nearly three decades ago.

The documents, found in a garage by a retired computer expert, describe the Capture system as “an accident waiting to happen”.

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Post Office: The lost ‘Capture’ files

Sir Alan said the Sky News investigation showed “yet another failure of government oversight; another failure of the Post Office board to ensure [the] Post Office recruited senior people competent of bringing in IT systems” and management that was “out of touch with what was going on within its organisation”.

The unearthed Capture report was commissioned by the defence team for sub postmistress Patricia Owen and served on the Post Office in 1998 at her trial.

It described the software as “quite capable of producing absurd gibberish” and concluded “reasonable doubt” existed as to “whether any criminal offence” had taken place.

Ms Owen was found guilty of stealing from her branch and given a suspended prison sentence.

She died in 2003 and her family had always believed the computer expert, who was due to give evidence on the report, “never turned up”.

Pat Owen and husband David
Screengrabs from Adele Robinson i/vs with case study. Family of Pat Owen from Kent who was convicted of 1998 from stealing from her post office branch. Now the Capture IT system is suspected of adding errors to the accounts. 
Source P 175500FR POST OFFICE CAPTURE CASES ROBINSON 0600 VT V2 JJ1
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Patricia Owen (right) was convicted in 1998 of stealing from her post office branch. She died in 2003


Adrian Montagu reached out after seeing a Sky News report earlier this year and said he was actually stood down by the defending barrister with “no reason given”.

The barrister said he had no recollection of the case.

Victims and their lawyers hope the newly found “damning” expert report, which may never have been seen by a jury, could help overturn Capture convictions.

Read more: Post Office scandal redress must not only be fair – it must be fast

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What is the Capture scandal?

‘These people have to be brought to account’

Sir Alan, the leading campaigner for victims of the Horizon Post Office scandal, said while “no programme is bug free, why [was the] Post Office allowed to transfer the financial risk from these bugs on to a third party ie the sub postmaster, and why did its lawyers continue with prosecutions seemingly knowing of these system bugs?”

He continued: “Whether it was incompetence or corporate malice, these people have to be brought to account for their actions, be it for Capture or Horizon.”

More than 100 victims have come forward

More than 100 victims, including those who were not convicted but who were affected by the faulty software, have so far come forward.

Capture was used in 2,500 branches between 1992 and 1999, just before Horizon was introduced – which saw hundreds wrongfully convicted.

The Criminal Cases Review Commission (CCRC), the body responsible for investigating potential miscarriages of justice, is currently looking at a number of Capture convictions.

A CCRC spokesperson told Sky News: “We have received applications regarding 29 convictions which pre-date Horizon.
25 of these applications are being actively investigated by case review managers, and two more recent applications are in the preparatory stage and will be assigned to case review managers before the end of June.

“We have issued notices under s.17 of the Criminal Appeal Act 1995 to Post Office Ltd requiring them to produce all material relating to the applications received.

“To date, POL have provided some material in relation to 17 of the cases and confirmed that they hold no material in relation to another 5. The CCRC is awaiting a response from POL in relation to 6 cases.”

A spokesperson for the Department for Business and Trade said: “Postmasters negatively affected by Capture endured immeasurable suffering. We continue to listen to those who have been sharing their stories on the Capture system, and have taken their thoughts on board when designing the Capture Redress Scheme.”

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Government considering measure to slash industrial energy prices

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Government considering measure to slash industrial energy prices

Ministers are considering a commitment to cut soaring industrial energy prices for British companies to the same level enjoyed by competitors in France and Germany as part of its industrial strategy.

Sky News understands proposals to make energy prices more competitive are at the heart of final discussions between the Department for Business and Trade and the Treasury ahead of the publication of its industrial strategy on Monday.

Industrial electricity prices in the UK are the highest in the G7 and 46% above the median for the 32 member states of the International Energy Agency, which account for 75% of global demand.

Industrial electricity prices by country
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Industrial electricity prices by country

In 2023, British businesses paid £258 per megawatt-hour for electricity compared to £178 in France and £177 in Germany, according to IEA data. Matching those prices will require a reduction of around 27% at a cost of several billion pounds.

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Earlier this month, automotive giant Nissan said UK energy prices make its Sunderland plant its most expensive in the world.

Business secretary Jonathan Reynolds is understood to be sympathetic to business concerns, and chancellor Rachel Reeves told the CBI’s annual dinner the issue of energy prices “is a question we know we need to answer”.

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Extending relief

While around 350 companies in energy-intensive industries, including steel, ceramics and cement, enjoy some relief from prices through the energy supercharger scheme, which refunds 60% of network charges and is expected to rise to 90%, there is currently no support for manufacturers.

Sky News understands ministers are considering introducing a similar scheme to support the 200,000 manufacturing businesses in the UK.

Cutting network costs entirely could save more than 20% from electricity prices.

Explainer: Why are UK industrial electricity prices so high?

The mechanism for delivering support is expected to require consultation before being introduced to ensure only businesses for whom energy is a central cost would benefit. This could be based on the proportion of outgoings spent on energy bills.

It is not clear how the scheme would be funded, but the existing industrial supercharger is paid for by a levy on energy suppliers that is ultimately passed on to customers.

A central demand

Bringing down prices, particularly for electricity, has been the central demand of business and industry groups, with Make UK warning high prices are rendering businesses uncompetitive and risk “deindustrialising” the UK.

The primary driver of high electricity costs in the UK is wholesale gas, which both underpins the grid and sets the price in the market, even in periods when renewables provide the majority of supply.

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Why are costs so high?

Wholesale prices account for around 39% of bills, with operating costs and network charges – the cost of using and maintaining the grid – making up another 25%, and VAT 20%.

Business groups, including the manufacturers group Make UK, have called for a reduction in those additional charges, as well as the so-called policy costs that make up the final 16% of bills.

UK industrial electricity prices
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UK industrial electricity prices

These are made up of levies and charges introduced by successive governments to encourage and underwrite the construction of renewable sources of power.

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Make UK estimate that shifting policy costs into general taxation would cost around £3.8bn, but pay for itself over time in increased growth.

Government sources confirmed that energy prices are a central issue that the industrial strategy will address, but said no final policy decisions have been agreed.

The industrial strategy, which is delayed from its scheduled publication earlier this month, will set out the government’s plans to support eight sectors identified as having high-growth potential, including advanced manufacturing, life sciences, defence and creative industries.

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