Government nationalises defence tech firm CEA Technologies

By Peter Roberts

The federal government has entered into an agreement to buy defence radar systems manufacturer, CEA Technologies, ultimately creating a new Government Business Enterprise (GBE).

CEA’s sophisticated radars are standard on board Royal Australian Navy vessels and are currently being retrofitted to Australia’s ANZAC class frigates in a major upgrade by BAE Systems at their yard in Henderson, Western Australia.

The Canberra company’s CEAFAR radar is an active phased array radar that combines microwave tile and Digital Beam Forming (DBF) technologies, and is capable of tracking and targeting multiple hostile aircraft and missiles.

According to the federal government the agreement advances the important and longstanding partnership between the Commonwealth and CEA, ensuring the continued development of Australia’s radar capability in an increasingly complex strategic environment.

From July 2023, the Commonwealth will hold a non-controlling shareholding in CEA for 18 months. After that time CEA will be majority owned by the Commonwealth and become a GBE.

CEA will continue to operate as an independent for-profit company at arms-length from the government.

According to the federal government the agreement secures the long-term ownership arrangements of CEA which will:

• Allow the company to continue on its path to grow and develop the suite of products and services it provides with an acute focus on sovereign defence capability
• Preserve the culture of innovation to pursue commercial opportunities and further develop the technology, whilst maintaining a strong focus on national security
• And give the existing staff and investors in CEA certainty and clarity about the future.

Deputy Prime Minister and Defence Minister Richard Marles said: “Today’s landmark agreement secures the longevity of this Australian company and guarantees supply of critical radar systems for the ADF, now and into the future.

“The approach the Commonwealth has taken, in partnership with existing shareholders, will ensure CEA is on the path to grow and develop over the long term, in order to meet the ongoing needs of Australia and its international partners.”

It is not known what sparked the federal government intervention in CEA, which employs 600, other than the critical nature of its technologies.

Asset values of Australian owned defence technology manufacturers plunged over the past year along with technology stocks globally.

However the government did not act to stop Perth communications manufacturer Barrett Communications falling into foreign hands – in this case Motorola – in August.

A number of other defence SMEs and technology businesses are considered vulnerable to foreign takeover such as Canberra’s Electro Optic Systems Holdings, which has recently begun exporting weapons systems to Ukraine.

Canberra said the decision had no impact on procurement decisions by the Department of Defence.

Minister for Defence Industry Pat Conroy said: “CEA is an Australian manufacturing powerhouse, with world leading know how and decades of industry experience that has led to the design and development of cutting edge radar systems.

“CEA provides critical capabilities for a number of our major naval surface combatants, amongst other projects, and plays a vital role in our national security.

“The phased array radar capabilities within CEA are a critical sovereign capability and today’s agreement protects the incredible capability of the CEA workforce and their unmatched ability in the field of radar technologies.”

Further reading:
WARSHIP ALLIANCE SECURES CONTRACT EXTENSION
MOTOROLA POUNCES ON BARRETT COMMUNICATIONS

Picture: BAE Systems Australia/Inatsllation of CEA Technologies radar mast on board HMAS Stuart