The Government has announced it had acquired an ownership interest in Canberra-based manufacturer of radar systems, CEA Technologies.
The company’s major products include phased array radar, missile guidance, integrated communications systems, data-fusion and antenna systems.
Under the terms of the deal, from July 2023 the Commonwealth will hold a non-controlling shareholding in CEA for 18 months. After this time, CEA will be majority owned by the Commonwealth and become a new Government Business Enterprise (GBE).
A Government Business Enterprise in Australia is a Commonwealth entity or Commonwealth company that falls under the rules of the PGPA Act.
The Government said that the agreement advanced “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”.
The agreement secures long-term ownership arrangements of CEA, which the Government confirmed 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.
CEA will continue to operate as an independent for-profit company at arms-length from Government.
“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,” Minister for Defence Industry Pat Conroy said.
“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.”
Currently a privately owned Australian company, CEA maintains facilities in Canberra, Adelaide, Melbourne, Perth, Newcastle and Brisbane. It also has a growing subsidiary in the US, headquartered in Maryland.
The Australian Government’s relationship with its GBEs is similar to that between a holding company and its subsidiaries, features of which include:
- a strong interest in the performance and financial returns of the GBE
- reporting and accountability arrangements that facilitate active oversight by the shareholder
- action by the shareholder in relation to the strategic direction of its GBEs where it prefers a different direction from the one proposed
- management autonomy balanced with regular reporting of performance to shareholders; and
- boards that are accountable to shareholders for GBE performance, and shareholders that are accountable to Parliament and the public.