AeroVironment acquires BlueHalo in $4.1 billion deal to expand defense capabilities

AeroVironment Inc., a key supplier of small drones to the US military, has announced a $4.1 billion all-stock acquisition of Arlington-based BlueHalo LLC, reports the Washington Business Journal. The combined company integrates AeroVironment’s capabilities with BlueHalo’s expertise in space technologies, electronic warfare, and AI. The combined company, with AeroVironment CEO Wahid Nawabi at the helm, will target next-generation defense solutions.

The transaction, expected to close in the first half of 2025, will grant Arlington Capital Partners—BlueHalo’s majority owner—a significant stake and two board seats in the merged entity. AeroVironment projects the acquisition will enhance its earnings and revenue starting the first fiscal year post-close. BlueHalo, known for its rapid growth since 2020, complements AeroVironment’s historic innovations in human-powered and solar-powered flight.

This strategic move highlights growing industry competition to meet emerging defense priorities, though AeroVironment's shares dipped 5% following the announcement.