Australia could nationalise a critical Defence radar maker for security purposes.

Australia's leading military radar and communications systems manufacturer, CEA Technologies, is set to become majority-owned by the federal government as part of a deal worth $500 million. 

The move is seen as a bid to secure sovereign critical capabilities as Australia shifts spending away from howitzers towards subs, missiles, and air and sea power. 

Losing local firms to cashed-up allies or multinationals often results in a poor financial outcome for taxpayers because the price usually goes up after the deal goes down. 

As per the deal's terms, 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 government business enterprise (GBE). 

The deal to take a phased majority stake in the key contractor and manufacturer, which scored a $277 million contract to provide advanced electronic warfare capabilities for the Air Force's EA-18G Growler signals-jammer aircraft just this year, heads off a potential pounce by international giants. 

Australia's recent Defence Strategic Review and AUKUS agreements have made the local defence industry hot property for buyouts from bigger ‘primes.' 

“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,” said Deputy Prime Minister and Minister for Defence Richard Marles.

“The Australian Government recognizes the 600 strong workforce at CEA and their cutting edge approach to designing and delivering essential defence capabilities that will only be further strengthened through sovereign ownership.” 

Finance Minister Katy Gallagher, also an ACT senator where CEA is headquartered, has run the ruler over the deal and given it a tick.

The acquisition announcement said the deal would allow CEA 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”.

It would also “preserve the culture of innovation to pursue commercial opportunities” and further develop the technology, “whilst maintaining a strong focus on national security”.