L3Harris makes a move to expand the U.S. defense industrial base, announcing plans to create a new, independently traded Missile Solutions company backed by a $1 billion investment from the Department of War. The goal is straightforward but ambitious: dramatically increase the nation’s capacity to build the solid rocket motors that power some of the most critical missile systems in the U.S. and allied arsenals.
l3Harris Makes A Shift in Defense Acquisition Strategy
The proposed partnership represents a first-of-its-kind arrangement between L3Harris and the Pentagon. Under the agreement, the Department would invest $1 billion through a convertible preferred security that would convert to common equity once the Missile Solutions business goes public. L3Harris plans to pursue an initial public offering in the second half of 2026, creating a pure-play missile propulsion company designed to deliver at speed and scale.
The announcement builds on L3Harris’ 2023 acquisition of Aerojet Rocketdyne, a deal that reshaped the company’s role in missile propulsion. Since then, L3Harris has poured investment into modernizing production and consolidating its propulsion capabilities under the newly formed Missile Solutions business. That business now supports both offensive and defensive missile programs, including PAC-3, THAAD, Tomahawk, and the Standard Missile family.
Company leadership framed the move as both a national security imperative and a response to broader shifts in defense acquisition strategy. L3Harris Chairman and CEO Christopher Kubasik said the company is acting to build a modern “Arsenal of Freedom” at a time when policymakers are placing renewed emphasis on strengthening the defense industrial base and restoring competition after decades of consolidation.
The structure of the deal is notable. While the Missile Solutions business will operate as an independent public company following the IPO, L3Harris will retain a controlling interest. The company says this approach sharpens strategic focus while unlocking long-term value for shareholders and delivering faster, more resilient capabilities to the warfighter.
Pentagon Signals Demand in Key Areas with New Strategy
From a workforce and industry perspective, the announcement signals sustained demand for missile propulsion talent, advanced manufacturing expertise, and supply chain resilience. Expanding solid rocket motor capacity has been a persistent challenge across the defense sector, especially as global conflicts and deterrence missions increase pressure on production timelines.
L3Harris plans to provide more detail on the partnership during an investor conference scheduled today. The company is being advised by J.P. Morgan Securities, with Vinson & Elkins serving as legal counsel.
The strategy behind this investment reflects a broader shift in how the Pentagon wants to work with key suppliers. Rather than relying solely on traditional contracts and purchase orders, the Department’s new acquisition strategy aims to invest directly in critical industrial capabilities. This approach is part of what some officials describe as a “Go Direct-to-Supplier” initiative, which seeks to secure supply chains, modernize production lines and cut the time it takes to field vital systems.
Pentagon leaders frame the deal as an effort to strengthen national security through industry innovation and industrial base resilience. Under Secretary of War for Acquisition and Sustainment Michael Duffey said that by making a direct investment in suppliers, the department is building the resilient industrial foundation needed to maintain what some officials describe as the “Arsenal of Freedom.”
As the U.S. defense enterprise looks to modernize acquisition pathways and accelerate delivery of critical systems, the creation of a standalone Missile Solutions company could become a case study in how industry and government collaborate to scale capacity without sacrificing speed or competition.
