The U.S. Department of Defense announced its intention to become a “anchor investor” in L3Harris Technologies, allocating $1 billion for the expansion of solid rocket motor (SRM) production. The conversion will only occur if the rocket division’s planned initial public offering (IPO) takes place, which the company intends to conduct in the second half of 2026.
This action represents one of the most substantial interventions by the U.S. government in the defense industry sector. The Pentagon stated that the accord is a direct result of its procurement transformation strategy, focused on placing investments across the entire supply chain to secure better terms for taxpayers.
Demand for SRMs has sharply increased in recent years. Manufacturing remains capital-intensive and concentrated, with long qualification timelines and hazardous production procedures. The Pentagon’s funding will support the expansion of facilities in Camden (Arkansas), Orange (Virginia), Huntsville (Alabama), and Canoga Park (California).
L3Harris Chairman and CEO Christopher Kubasik affirmed that the firm will retain a controlling stake in Missile Solutions, and the government will have no management role in the business. According to him, L3Harris spent several months collaborating with Pentagon representatives on the deal’s structure, concluding that the company required at least $1 billion to update and scale SRM output to the levels mandated by the Department of Defense.
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