Jan 5 (Reuters) - L3Harris Technologies said on Monday it will sell an about 60% stake in its space propulsion and power systems business to private equity firm AE Industrial Partners for $845 million, including debt.
The deal furthers L3Harris' plan to shift its focus away from space and towards defense capabilities amid an increasingly uncertain global geopolitical environment.
Separately, the defense supplier said it will also reorganize its structure to three business segments from four previously in order to align its portfolio with the "future of warfare."
The new segments are space and mission systems led by Sam Mehta, communications and spectrum dominance led by Jon Rambeau, and missile solutions helmed by Ken Bedingfield.
"We're now best poised to deliver the speed, technology and commerciality required by our most important customer – the warfighter," said L3Harris CEO Christopher Kubasik.
The company will, however, continue to have sole ownership of the RS-25 rocket engine, which is currently used on NASA's space launch system for the Artemis program.
The deal with AE Industrial, which was first reported by Reuters on Sunday, is expected to close in the second half of 2026.
AE Industrial said its partnership with L3Harris would also accelerate the development of future propulsion technologies, including nuclear propulsion, which will be critical to the exploration of Mars.
AE's previous space investments include Firefly Aerospace, RedWire Space and York Space Systems.
(Reporting by Aishwarya Jain and Megavarshini G. Somasundaram in Bengaluru; Editing by Devika Syamnath and Shailesh Kuber)
