America may have taken one step closer to Mars today after aerospace technology group L3Harris (LHX) sold a majority stake in part of its space propulsion business to private investment firm AE Industrial.
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Space Propulsion Control
L3Harris, whose shares edged higher, said AE Industrial, which is focused on technologies and services considered critical to aerospace and national and economic security, had bought a controlling interest in its Space Propulsion and Power Systems business for $845 million.
L3Harris will retain a 40% ownership stake in the new space technology business, to be known as Rocketdyne, with AE Industrial when the deal closes in the second half of this year. It will continue to act as a strategic partner to the business.
L3Harris’ RS-25 rocket engine business is excluded from the sale. It is the core propulsion system for NASA’s Space Launch System (SLS) used in the Artemis lunar missions.
It will mean an increased focus from L3Harris on other major initiatives such as President Trump’s Golden Dome space-based defense scheme. The company will also hope it gives a further boost to its share price which is up nearly 50% in the last 12 months.
“L3Harris is strongly committed to the Department of War’s (DoW) vision for a faster, more agile defense industrial base while remaining laser-focused on driving value for our shareholders and customers,” said Christopher Kubasik, Chairman and CEO, L3Harris. “This transaction further aligns the L3Harris portfolio with DoW core mission priorities.”
New Life for Space Technology
AE said the deal encompasses business units across five locations in the U.S., which have developed the upper-stage rocket engines used in national security, civil and commercial missions for more than 60 years, as well as in-space propulsion, nuclear power and avionics assets.
AE Industrial said it plans to restore and use the “Rocketdyne” name for the “acquired business in recognition of its heritage and longstanding innovation within space propulsion technology.”
The partnership will aim to help accelerate the development of future propulsion technologies, including nuclear propulsion, which will be critical to the exploration of Mars.
“Rocketdyne is more than just a company, it is the birthplace of U.S. rocket propulsion,” said Kirk Konert, Managing Partner at AE Industrial. “This transaction will not only modernize and give new life to a pioneer of space and national defense technology, but it will also create a new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor. By taking the historic engine – the RL10 – and applying modern manufacturing discipline, we will honor its design while revolutionizing the production line.”
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