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L3Harris Hands Space Propulsion Business to Private Equity, Keeps a Slice

MarketDash Editorial Team
3 days ago
L3Harris Technologies is selling majority control of its Space Propulsion and Power Systems unit to AE Industrial Partners in an $845 million deal, retaining about 40% ownership while the storied Rocketdyne name makes a comeback.

L3Harris Technologies (LHX) announced Monday it's handing over majority control of its Space Propulsion and Power Systems business to AE Industrial Partners, a private investment firm that specializes in aerospace and national security tech. It's the kind of deal where operational control shifts hands, but L3Harris isn't exactly walking away—they're keeping around 40% of the action.

What's Changing Hands

The sale encompasses propulsion systems, power infrastructure, avionics, and nuclear-related assets spread across five U.S. locations. These aren't just any rocket parts—we're talking upper-stage engines used in national security missions, civil space programs, and commercial launches, plus in-space propulsion and power technologies that keep satellites functional once they're up there.

Here's where it gets nostalgic: AE Industrial plans to bring back the Rocketdyne name, which carries serious weight in American space history. Kirk Konert, managing partner at AE Industrial, described Rocketdyne as "the birthplace of U.S. rocket propulsion" and said his firm intends to modernize manufacturing while keeping the proven designs intact.

The Numbers

The transaction values the business at roughly $845 million. L3Harris keeps that significant minority stake of approximately 40%, and importantly, the company's RS-25 rocket engine business stays off the table entirely—that's not part of this deal.

Both companies expect to wrap this up in the second half of 2026, assuming they clear the usual regulatory hurdles and closing conditions.

Strategic Rationale

For L3Harris CEO Christopher Kubasik, this move sharpens the company's focus on Department of Defense priorities while maintaining shareholder value. It's essentially portfolio optimization—keeping skin in the game through that minority stake while letting someone else handle day-to-day operations.

AE Industrial, meanwhile, sees an opportunity to preserve capabilities they view as critical for U.S. space leadership. Their pitch involves applying modern manufacturing discipline to technologies that already work, which sounds less risky than reinventing the rocket engine from scratch.

Price Movement: L3Harris shares jumped 1.90% to $310.26 on Monday, marking a fresh 52-week high for the stock.

Back to Stock Market News

L3Harris Hands Space Propulsion Business to Private Equity, Keeps a Slice

MarketDash Editorial Team
3 days ago
L3Harris Technologies is selling majority control of its Space Propulsion and Power Systems unit to AE Industrial Partners in an $845 million deal, retaining about 40% ownership while the storied Rocketdyne name makes a comeback.

L3Harris Technologies (LHX) announced Monday it's handing over majority control of its Space Propulsion and Power Systems business to AE Industrial Partners, a private investment firm that specializes in aerospace and national security tech. It's the kind of deal where operational control shifts hands, but L3Harris isn't exactly walking away—they're keeping around 40% of the action.

What's Changing Hands

The sale encompasses propulsion systems, power infrastructure, avionics, and nuclear-related assets spread across five U.S. locations. These aren't just any rocket parts—we're talking upper-stage engines used in national security missions, civil space programs, and commercial launches, plus in-space propulsion and power technologies that keep satellites functional once they're up there.

Here's where it gets nostalgic: AE Industrial plans to bring back the Rocketdyne name, which carries serious weight in American space history. Kirk Konert, managing partner at AE Industrial, described Rocketdyne as "the birthplace of U.S. rocket propulsion" and said his firm intends to modernize manufacturing while keeping the proven designs intact.

The Numbers

The transaction values the business at roughly $845 million. L3Harris keeps that significant minority stake of approximately 40%, and importantly, the company's RS-25 rocket engine business stays off the table entirely—that's not part of this deal.

Both companies expect to wrap this up in the second half of 2026, assuming they clear the usual regulatory hurdles and closing conditions.

Strategic Rationale

For L3Harris CEO Christopher Kubasik, this move sharpens the company's focus on Department of Defense priorities while maintaining shareholder value. It's essentially portfolio optimization—keeping skin in the game through that minority stake while letting someone else handle day-to-day operations.

AE Industrial, meanwhile, sees an opportunity to preserve capabilities they view as critical for U.S. space leadership. Their pitch involves applying modern manufacturing discipline to technologies that already work, which sounds less risky than reinventing the rocket engine from scratch.

Price Movement: L3Harris shares jumped 1.90% to $310.26 on Monday, marking a fresh 52-week high for the stock.