L3Harris Technologies has agreed to sell a majority stake in its Propulsion and Power Systems division to AE Industrial Partners for $845 million.
On January 5, 2026, L3Harris said that the agreement ensures that the company’s portfolio of businesses aligns with the prime concerns of the United States (US).
“L3Harris is strongly committed to the Department of War’s (DoW) vision for a faster, more agile defense industrial base while remaining laser-focused on driving value for our shareholders and customers,” said Christopher Kubasik, Chairman and CEO, L3Harris. “This transaction further aligns the L3Harris portfolio with DoW core mission priorities.”
L3Harris will retain a 40% ownership stake in the new space technology business with AE Industrial taking the majority 60% share. L3Harris’ RS-25 rocket engine business is excluded from the sale.
The transaction encompasses business units across five locations in the US, which have developed the upper-stage rocket engines used in national security, civil and commercial missions for more than 60 years, as well as in-space propulsion, nuclear power and avionics assets.
AE Industrial plans to restore and use the “Rocketdyne” name for the acquired business in recognition of its heritage and longstanding innovation within space propulsion technology.
“Rocketdyne is more than just a company, it is the birthplace of U.S. rocket propulsion,” said Kirk Konert, Managing Partner at AE Industrial. “This transaction will not only modernize and give new life to a pioneer of space and national defense technology, but it will also create a new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor.”
He added: “By taking the historic engine – the RL10 – and applying modern manufacturing discipline, we will honor its design while revolutionizing the production line.”
The transaction is expected to close in the second half of 2026, subject to obtaining regulatory approvals and satisfaction of other customary closing conditions.
“L3Harris has consistently pursued traditional and non-traditional partnerships to drive business growth and advance critical technologies. Previous space investments of AE Industrial include Firefly Aerospace, RedWire Space and York Space Systems, demonstrating the group’s experience with national security and space exploration markets,” added a spokesperson for L3Harris.