L3Harris Sells Majority Stake in Space Propulsion Unit to AE Industrial
L3Harris Technologies has announced plans to sell a majority stake in its space propulsion unit to AE Industrial Partners. This agreement aims to reshape L3Harris’ portfolio following its acquisition of Aerojet Rocketdyne in 2023. The deal involves AE Industrial acquiring a 60% interest in the Space Propulsion and Power Systems division, valued at approximately $845 million.
Details of the Transaction
The transaction is expected to close in the second half of 2026, pending regulatory approvals. L3Harris will retain a 40% ownership stake in the space propulsion business. This unit is responsible for developing advanced rocket engines, in-space propulsion systems, and space power technologies.
Key Components of the Space Propulsion Unit
- RL-10 upper-stage engine
- In-space electric thrusters
- Power systems for spacecraft and exploration missions
- Next-generation nuclear propulsion concepts
The propulsion division provides critical hardware for various missions, including those supporting Mars rovers and NASA’s lunar Gateway. Importantly, the deal does not include the RS-25 rocket engine program, which will remain fully owned by L3Harris. The RS-25 engine is crucial for NASA’s Artemis missions.
Strategic Focus on Defense
This sale aligns with L3Harris’ renewed emphasis on core defense priorities, particularly in missile production and other defense technologies. The divested assets are viewed as better integrated within AE Industrial’s commercial-focused portfolio.
Christopher Kubasik, CEO of L3Harris, emphasized the company’s commitment to national defense. He stated that the decision reflects the company’s aim to drive shareholder value while aligning with the Department of War’s mission priorities.
The Future of Rocketdyne
AE Industrial plans to revive the Rocketdyne brand with this acquisition. Kirk Konert, managing partner at AE Industrial, noted that Rocketdyne is a historic entity in U.S. rocket propulsion. He underscored the importance of modernizing this legacy while enhancing collaboration between defense and investment innovations.
AE Industrial’s portfolio also includes other notable space companies, such as Firefly Aerospace and Redwire Space. The partnership with L3Harris will look to expedite advancements in future propulsion technologies, including nuclear systems essential for deep-space exploration.
Conclusion
This strategic move by L3Harris represents a significant change in its business structure, emphasizing a focused approach on defense while allowing AE Industrial to innovate within the space technology sector. The collaboration is poised to advance propulsion technology for future exploration missions.
