The proposed Missile Solutions business would focus on solid rocket motors and advanced propulsion systems that underpin not only a wide range of US and allied missile programs but also key elements of space access, missile warning and integrated air and missile defence architectures.
L3Harris argued that the initiative is central to restoring scale, speed and resilience across propulsion technologies that sit at the intersection of missile defence and space operations.
At the heart of the plan is a proposed US$1 billion (AU$1.5 billion) investment from the US Department of War, structured as a convertible preferred security that would convert to ordinary shares upon an initial public offering (IPO).
L3Harris intends to pursue an IPO of the Missile Solutions business in the second half of 2026, creating a dedicated “pure-play” propulsion company focused on delivering critical systems at a pace aligned with emerging operational demands.
The proposed partnership reflects a broader shift in US defence and space acquisition policy, as government and industry move to address longstanding production bottlenecks in solid rocket motors, a foundational technology for missile interceptors, hypersonic weapons, space launch vehicles and responsive on-orbit capabilities.
Since acquiring Aerojet Rocketdyne, L3Harris has invested heavily in modernising and expanding its propulsion manufacturing base. The creation of Missile Solutions consolidates those capabilities into a single entity supporting offensive and defensive missiles while also providing the industrial backbone for national security space programs that rely on high-performance solid propulsion.
L3Harris said the expanded capacity would directly support priority programs such as PAC-3 and THAAD missile defence interceptors, Tomahawk and Standard Missile variants, and propulsion technologies relevant to space launch, boost-phase missile tracking and next-generation space control systems.
Chair and chief executive Christopher Kubasik framed the move as part of a renewed push to rebuild what he described as a modern “arsenal of freedom”, with space now firmly embedded in deterrence and warfighting concepts.
“Space and missile propulsion are inseparable in today’s security environment,” Kubasik said. “Strengthening the industrial base in this area is essential not only for defeating threats in the air and at sea, but for assuring access to space and protecting critical space-based capabilities.”
The initiative aligns with recent US government efforts to treat space as a warfighting domain, requiring assured launch, resilient supply chains and rapid surge capacity in a crisis.
Industry analysts note that shortages in solid rocket motor production have become a strategic constraint across both missile defence and space sectors, amplifying the significance of the L3Harris proposal.
Under the plan, L3Harris would retain a controlling interest in the Missile Solutions business following the IPO. The company said the separation would sharpen strategic focus, unlock shareholder value and accelerate investment in propulsion technologies that support both missile and space missions.
For allies such as Australia, the announcement carries broader implications. Australia’s growing reliance on space-enabled intelligence, surveillance and reconnaissance, missile warning and integrated air and missile defence, alongside ambitions for greater sovereign space capability, means the health and scalability of the US propulsion industrial base is increasingly a matter of strategic interest.
L3Harris will host an investor briefing on 13 January 2026 to outline details of the proposed government partnership and spin-off. JP Morgan Securities is acting as financial adviser to L3Harris, with Vinson & Elkins providing legal counsel on the transaction.
While still subject to approvals, the move underscores a deepening convergence between missile production and space power, as the United States and its allies seek to rebuild the industrial foundations of deterrence in an increasingly contested strategic environment.