Jan 5 (GeokHub) — U.S. defense contractor L3Harris Technologies said on Monday it will sell about a 60% stake in its space propulsion and power systems business to private equity firm AE Industrial Partners for $845 million, including debt, as it sharpens its focus on defense operations.
The sale marks another step in L3Harris’ strategy to scale back its exposure to space-related businesses and concentrate on core military capabilities amid rising geopolitical tensions and increased global defense spending.
Alongside the divestment, L3Harris announced a major organizational overhaul, consolidating its structure into three business segments, down from four, to better align with what it described as the “future of warfare.”
Under the new structure, Sam Mehta will lead Space and Mission Systems, Jon Rambeau will head Communications and Spectrum Dominance, and Ken Bedingfield will oversee Missile Solutions.
Chief Executive Christopher Kubasik said the changes position the company to deliver faster and more advanced technologies to its primary customer, the U.S. military.
“We’re now best poised to deliver the speed, technology and commerciality required by our most important customer – the warfighter,” Kubasik said.
L3Harris said it will retain full ownership of the RS-25 rocket engine, which powers NASA’s Space Launch System for the Artemis moon program.
The transaction, first reported earlier, is expected to close in the second half of 2026, subject to regulatory approvals.
AE Industrial said the partnership would help accelerate the development of next-generation propulsion technologies, including nuclear propulsion, which it said could play a key role in future missions to Mars.
AE Industrial’s space portfolio already includes investments in Firefly Aerospace, RedWire Space, and York Space Systems.
