L3Harris Technologies (NYSE:LHX) said it plans to separate its Missile Solutions business into a standalone, publicly traded company, supported by a $1 billion investment from the U.S. Department of Defense in the form of a convertible preferred security.
Under the proposal, the Defense Department’s investment would convert automatically into common shares when the missile unit completes an initial public offering, which L3Harris is targeting for the second half of 2026. Following the transaction, L3Harris will continue to hold a controlling stake in the Missile Solutions business.
The new entity is intended to operate as a pure-play solid rocket motor manufacturer, supplying missile programs for the United States and its allies. The Defense Department funding is designed to help expand production capacity for key missile systems, including PAC-3, THAAD, Tomahawk and the Standard Missile family.
L3Harris formed the Missile Solutions segment after its acquisition of Aerojet Rocketdyne, bringing together capabilities across both offensive and defensive missile technologies.
“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 added that recent actions by the administration have highlighted the need to reinforce the defense industrial base and promote greater competition following decades of industry consolidation.
L3Harris described the proposed structure as a first-of-its-kind partnership with the Defense Department, saying it aligns with the Pentagon’s strategy to modernize and transform its acquisition approach.
The company said it will host an investor conference on January 13, 2026, to provide further details on the Defense Department partnership. J.P. Morgan Securities is acting as financial advisor on the transaction, while Vinson & Elkins is serving as legal advisor.
The announcement was made in a company press release outlining the proposed partnership and the planned public offering of the missile unit.