L3Harris Technologies has agreed to divest controlling interest in its Space Propulsion and Power Systems business to AE Industrial.
The deal, which values 100% of the business at $845m, is anticipated to close in the second half of 2026, contingent upon regulatory approvals and other customary conditions.
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L3Harris will retain an approximately 40% stake in the newly established space technology entity with AE Industrial. The RS-25 rocket engine business is not included in the deal.
Jefferies provided exclusive financial advisory services to L3Harris for the transaction.
L3Harris chairman and CEO Christopher Kubasik said: “L3Harris is strongly committed to the Department of War’s (DoW) vision for a faster, more agile defence industrial base while remaining laser-focused on driving value for our shareholders and customers. This transaction further aligns the L3Harris portfolio with DoW core mission priorities.”
In a separate announcement, L3Harris has restructured its organisation from four business segments to three, effective 5 January 2026.
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By GlobalDataThe new divisions will be Space & Mission Systems, Communications & Spectrum Dominance, and Missile Solutions overseen by Ken Bedingfield, who will also continue as senior vice president and chief financial officer.
Space & Mission Systems led by Sam Mehta will bring together satellite and payload operations with missile warning and defence as well as global defence and civil government initiatives across maritime and air special missions.
Communications & Spectrum Dominance, headed by Jon Rambeau, consolidates all communications resilience and electronic warfare offerings.
Missile Solutions integrates propulsion, hypersonics, and other advanced missile technologies.
“This change thoughtfully organises common business models, technical capabilities and investment priorities. Enabling the Arsenal of Freedom requires action, and we’re now best poised to deliver the speed, technology and commerciality required by our most important customer – the warfighter,” Christopher Kubasik added.
For the third quarter of 2025, L3Harris reported revenue of $5.7bn, an increase of 7% year-on-year and 10% on an organic basis.
The operating margin stood at 11%, and its diluted earnings per share reached $2.46.
The company raised its guidance for 2025 based on these results and higher expectations.
