L3Harris plans to spin off missile unit with $1B DoD investment

L3Harris Technologies (NYSE: LHX) announced plans for a Department of Defense investment in its Missile Solutions business through a $1 billion convertible preferred security. The investment would automatically convert to common equity upon an initial public offering planned for the second half of 2026.

The defense contractor intends to create an independently traded company focused on solid rocket motor production for U.S. and allied missiles. L3Harris will retain a controlling interest in the Missile Solutions business following the transactions.

The investment aims to expand production capacity for Defense Department missile programs including PAC-3, THAAD, Tomahawk and Standard Missile systems. L3Harris created the Missile Solutions business after acquiring Aerojet Rocketdyne, combining capabilities for offensive and defensive missile systems.

"We're taking action to build today's 'Arsenal of Freedom' by launching a pure-play missile solutions provider," said Christopher Kubasik, chairman and CEO of L3Harris. He noted that recent administration actions have emphasized strengthening the defense industrial base and increasing competition after three decades of consolidation.

The proposed partnership represents what L3Harris describes as a first-of-its-kind arrangement with the Defense Department. The company stated the structure supports the department's acquisition transformation strategy.

L3Harris plans to host an investor conference on January 13, 2026, to discuss the Defense Department partnership. J.P. Morgan Securities serves as financial advisor and Vinson & Elkins as legal advisor on the proposed transaction.

The information comes from a company press release statement about the proposed partnership and planned public offering.

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