L3Harris Technologies has announced plans to divest a controlling interest in its Space Propulsion and Power Systems business, striking a deal with private equity firm AE Industrial Partners valued at $845 million. Under the terms of this agreement, AE Industrial will acquire a majority stake in the division, while L3Harris retains around 40 percent ownership.
The transaction is anticipated to close in the latter half of 2026, contingent upon obtaining necessary regulatory approvals and fulfilling customary closing conditions. Notably, the agreement excludes L3Harris’ RS-25 rocket engine program, which is integral to NASA’s Space Launch System.
The Space Propulsion and Power Systems business specializes in the development of propulsion, power generation, and related subsystems that serve a vast array of civil, commercial, and national security space missions. Although L3Harris did not provide specific financial performance details regarding this unit, the divestment aligns with the company’s broader strategy to rebalance its portfolio after multiple acquisitions and divestitures in recent years.
Following the merger of L3 Technologies and Harris Corporation in 2019, L3Harris has aimed to streamline its operations and concentrate on its core defense and communications competencies.
AE Industrial Partners, recognized for its investments in aerospace, defense, and government services, is expected to integrate the newly acquired business into its existing space-focused portfolio. This encompasses notable entities such as Firefly Aerospace, Redwire Space, and York Space Systems, which contribute to launch, satellite, and space infrastructure initiatives for both commercial and government sectors.
To facilitate this transaction, Jefferies LLC has been appointed as L3Harris’ exclusive financial advisor.
