BAE said it hoped to complete the acquisition of the aerospace firm in the first half of 2024, with an anticipated tax credit taking the "underlying economic consideration for the business" to $4.8 billion.

The proposed deal will be funded by a combination of new external debt and existing cash resources, it added.

Colorado-based Ball Aerospace supplies spacecraft, mission payloads, optical systems, and antenna systems, and counts the US Department of Defense and civilian space agencies among its clients.

It has more than 5,200 employees, of whom over 60 percent hold US security clearances.

The business is "well positioned to capture expected increases in demand for missiles and munitions", BAE noted in a press release announcing the acquisition.

Describing the aerospace firm as a "space and defence technology leader", BAE said it was a "highly complementary fit" with its own "portfolio and culture".

"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," BAE Systems chief executive Charles Woodburn said.

"The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence and Intelligence spending," he added.

Earlier this month BAE announced a record order book and half-year jump in net profits of 57 percent, as government defence spending increases amid the war in Ukraine.