Overview
- The Defense Department signed a letter of intent for a $1 billion convertible preferred investment in L3Harris’ Missile Solutions unit that will convert to common shares at a planned IPO in the second half of 2026.
- L3Harris will spin off Missile Solutions as a publicly traded company and retain majority control, while the Pentagon will hold no board seats and exercise no management authority.
- Funding comes from the Industrial Base Analysis and Sustainment program, with proposed multi-year procurement frameworks for solid rocket motors dependent on congressional authorization and appropriations.
- Officials describe the deal as the first direct-to-supplier partnership under the department’s Acquisition Transformation and Go Direct-to-Supplier initiatives to directly bolster critical suppliers.
- Industry analysts and competitors are raising conflict-of-interest and competition concerns that may draw regulatory or legislative scrutiny as the arrangement moves forward.