L3Harris Technologies is selling a majority stake of its space propulsion unit to AE Industrial Partners for $845 million, streamlining its focus on defense amidst rising military spending.

Target Information

L3Harris Technologies has entered into an agreement to divest a majority stake in its space propulsion and power systems unit to AE Industrial Partners for $845 million. This transaction involves the sale of approximately 60% of the targeted unit, inclusive of debt obligations. L3Harris's decision to proceed with this sale aligns with its strategic focus on minimizing its involvement in space-related activities, thereby reallocating resources towards enhancing its defense capabilities, especially amidst rising military expenditures driven by escalating geopolitical tensions.

In conjunction with this sale, L3Harris is implementing a reorganization of its operational framework, streamlining its business segments from four to three. The new structure will encompass space and mission systems, communications and spectrum dominance, and missile solutions. According to Chief Executive Officer Christopher Kubasik, these adjustments are intended to better synchronize the company’s offerings with the evolving landscape of military engagement.

Industry Overview

The aerospace and defense industry within the United States is witnessing substantial transformation, driven by a combination of increased government spending and a ramp-up in technology