Overview
- The Defense Department will provide $1 billion via convertible preferred securities that convert to equity at a planned initial public offering in the second half of 2026.
- L3Harris will spin off its Missile Solutions unit and keep majority ownership, while officials say the government will have no board seat or management role.
- Pentagon officials describe this as the first direct-to-supplier action under the Acquisition Transformation Strategy, with funding drawn from the Industrial Base Analysis and Sustainment program.
- The partnership is intended to expand solid-rocket motor capacity and enable multi-year procurement agreements, with broader production scaling contingent on congressional appropriations.
- L3Harris shares rose roughly 10% to 11% on the announcement as industry watchers noted the likelihood of regulatory and congressional scrutiny over competition and potential conflicts of interest.