L3Harris to Split Former Aerojet Rocketdyne Assets into Two Independent Companies

Aerojet Rocketdyne US0078001056

In a significant strategic shift, L3Harris Technologies has initiated a major restructuring of the former Aerojet Rocketdyne businesses it acquired in 2023. The plan, announced in early January 2026, involves separating the operations into two distinct entities through a pair of transactions, supported by a substantial capital infusion from the U.S. government.

A cornerstone of the reorganization is a $1 billion investment from the U.S. government. This capital will be provided through the purchase of convertible preferred shares, which are slated to be converted into common stock following an initial public offering (IPO). The announcement detailing this state-backed financing and the IPO plans was made on January 13.

The move comes after L3Harris completed its $4.7 billion acquisition of Aerojet Rocketdyne in July 2023, after which Aerojet Rocketdyne shares were delisted from the New York Stock Exchange. The current strategy will legally separate the space propulsion assets from the missile systems business.

Dual-Path Transaction Structure

The restructuring will unfold along two parallel tracks, both targeting completion in the second half of 2026:

1. Sale of Space Division: L3Harris has agreed to sell a majority stake in its "Space Propulsion and Power Systems" segment to private equity firm AE Industrial Partners. This unit, which includes the RL-10 upper-stage engine, is scheduled to be spun off and rebranded under the name "Rocketdyne."

2. IPO of Defense Unit: Concurrently, L3Harris plans to take the remaining "Missile Solutions" business public through an IPO. Under the current plan, L3Harris will retain a controlling majority stake in this entity post-listing.

Implications and Next Steps

This decisive action by L3Harris will result in the clear separation of the former Aerojet Rocketdyne assets into two focused, standalone companies. One will be an independently operated space propulsion specialist, while the other will be a publicly traded missile systems entity with direct government investment. The precise timing and final financing terms are expected to be finalized as the transactions progress toward their anticipated closing later in 2026.