L3Harris will sell about 60% of its space propulsion and power systems unit to private equity firm AE Industrial Partners for $845 million, including assumed debt. The deal supports L3Harris's shift toward defense priorities while the company retains sole ownership of the RS-25 engine used on NASA's Space Launch System for Artemis. AE Industrial said the partnership will speed development of advanced propulsion technologies, including nuclear propulsion for future Mars missions; the transaction is expected to close in H2 2026.
L3Harris Sells Roughly 60% Of Space Propulsion Unit To AE Industrial For $845M
FILE PHOTO: An L3Harris logo is displayed above a stand on the first day of the Indo Pacific International Maritime Exposition in Sydney, Australia, November 4, 2025. REUTERS/Hollie Adams/File Photo
L3Harris Technologies said on Monday it will sell roughly a 60% stake in its space propulsion and power systems unit to private equity firm AE Industrial Partners for $845 million, a figure that includes assumed debt. The move is part of L3Harris's broader effort to shift resources toward defense capabilities amid growing geopolitical uncertainty.
Strategic Focus And Retained Assets
While the transaction transfers control of the propulsion and power systems business to AE Industrial, L3Harris will retain sole ownership of the RS-25 rocket engine, which is currently used on NASA's Space Launch System for the Artemis program.
Partnership Goals
AE Industrial said the partnership with L3Harris will accelerate development of next-generation propulsion technologies, including advanced nuclear propulsion that supporters say will be critical for long-duration missions such as eventual crewed missions to Mars. AE Industrial's prior space-sector investments include Firefly Aerospace, RedWire Space and York Space Systems.
Timing And Closing
The companies said the deal is expected to close in the second half of 2026. Financial and operational details beyond the transaction value and the retained RS-25 ownership were not disclosed.
(Reporting by Aishwarya Jain and Megavarshini G. Somasundaram in Bengaluru; edited by Devika Syamnath.)
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