Catenaa, Tuesday, January 13, 2026- L3Harris Technologies’ stock rose by over 5% after the US government announced that it would invest $1 billion in the rocket motor business.
The deal represents the latest US government investment in Corporate America, which has included a 10% stake in chipmaker Intel and investments in critical mineral producers.
It comes just a few days after President Donald Trump blasted defense contractors for slow production of weaponry.
The deal guarantees a steady supply of the much-needed motors used in a wide range of missiles such as Tomahawks and Patriot interceptors.
L3Harris announced on Tuesday that it will spin off its rocket motor business into a new publicly traded company, backed by a $1 billion government convertible security investment. The securities will automatically convert to common equity when the company goes public later in 2026.
US defense efforts call for increased numbers of systems such as the SM-6 and SM-3 Block IIA air defense missiles, and advanced strike missiles such as PrSM.
Lockheed Martin said last week it had reached a deal with the Defense Department to more than triple production of Patriot PAC-3 missiles from about 600 a year to 2,000.
Anduril Industries purchased a solid-rocket motor company in 2023 and has invested more than $75 million in building a production facility in McHenry, Mississippi. Last month, Boeing chose Anduril to build the rocket motors for the US Army’s Integrated Fires Protection Capability system.
The government’s equity position in L3Harris could face blowback from L3Harris’ rivals, given that it creates a potentially significant conflict of interest for the US government.
The Pentagon will have an ownership stake in a company that regularly bids on major defense and other government contracts.
