This private equity giant is betting on commercial aerospace! To take over L3 Harris (LHX.US) space assets, focus on the “Golden Dome” and the wave of satellite deployment

The Zhitong Finance App learned that some media quoted information revealed by people familiar with the matter as reporting that L3Harris Technologies (LHX.US), a major US defense technology and aerospace project contractor, is close to reaching a major deal to sell 60% of its aerospace and promotion business asset portfolio to AE Industrial Partners, one of the world's private equity leaders. L3Harris Technologies, a major defense and military company headquartered in the US, is actively divesting part of NASA's business lines to further focus on the development of US national security technology and missile-priority strategies.

People familiar with the matter said the deal could be announced as early as Monday local time. This L3Harris deal will also be one of the largest deals in the global space industry in recent months. At a time when demand for the most advanced satellite systems and space-based defense systems in the global defense sector and commercial aviation sector continues to grow, large private equity firms around the world are increasingly showing strong integration capabilities in the commercial aerospace and defense and military space fields to catch up with this unprecedented wave of commercial aviation development, global military construction, and satellite deployment.

For example, as the AI boom begins to be bottlenecked by increasingly large-scale infrastructure and energy supplies, the next major leap forward in artificial intelligence may not take place on land, but in space — this is Elon Musk's latest grand vision on X.

“Further, it is possible to build a satellite factory on the moon and use mass drivers (electromagnetic orbital guns) to accelerate artificial intelligence satellites to the speed of escape to the moon without the need for rockets. This will enable AI computing power to reach more than 100 terawatts per year and push humanity to take an important step towards the Kardashev II civilization (Kardashev II civilization).” Musk wrote in a post on X.

According to recent media reports, two people familiar with the matter, who requested anonymity, said that the transaction dynamics are temporarily undisclosed. The US defense contractor will retain 40% of the asset portfolio; the corporate value of the company's business portfolio is about US$845 million, while AE Industrial will pay more than US$500 million for 60% of its share purchases.

“Golden Dome” Program

The deal could provide significant profit growth opportunities for AE Industrial in space exploration and the Pentagon's emerging “Golden Dome” program. The “Golden Dome” (or “Golden Dome” program) is a multi-level, space-based missile defense architecture; as satellite deployments are about to increase on a large scale and the commercial aviation sector dominated by SpaceX enters an accelerated development trajectory, AE Industrial may benefit greatly from this part of the aerospace propulsion assets acquired by L3Harris Technologies.

The “Golden Dome” program led by the US government also urgently requires the rapid development of commercial space technology around large-scale satellite deployment as a major prerequisite. In particular, the number of satellites can be said to directly determine the coverage capacity and market potential of commercial aerospace. This also means that aerospace assets under private equity giant AE Industrial are expected to further benefit from the global aviation competition led by China and the US.

The “Golden Dome” space-based missile defense system is a missile defense system planned by the United States to be deployed in space orbit. It aims to integrate existing land-based and sea-based anti-missile resources to enable the United States to intercept global and space-launched missiles at all times. The plan was announced and launched by US President Trump on May 20, 2025. The goal is to be put into operation within 3 years. The core structure includes a four-layer defense network, the first layer is a space-based satellite cluster (equipped with missile detection and interception devices), and the remaining three layers are land-based defense systems deployed in the mainland of the United States, Alaska, and Hawaii, which include more than 10 short-range missile launchers.

This time, part of the aerospace propulsion business sold by US defense giant L3 Harris Technologies includes the RL-10 Class 2 rocket engine, which is a “workhorse” engine for deploying assets in space. It is currently used on the “Vulcan (Vulcan)” rocket; the rocket is operated as a joint venture between Boeing (BA.UJS) and the United Launch Alliance (LMT.US) of the F-35 fighter.

According to people familiar with the matter, the business asset portfolio also covers: in-orbit propulsion systems (helping satellite constellations actively maintain position and maneuver at all times in an increasingly hostile environment), development of key nuclear power technology for lunar and Mars exploration applications, and key electronic equipment to support space launches and operations.

Notably, people familiar with the matter said that L3Harris will continue to maintain sole ownership of the extremely powerful RS-25 rocket engine; the engine is currently used in NASA's “Artemis (Artemis)” program's Space Launch System (Space Launch System), and will be retained along with the relevant workforce and core infrastructure.

People familiar with the matter also said that the deal is not expected to affect L3Harris's own cutting-edge products and advanced solutions in the “Golden Dome” program led by the US government.

The so-called “Golden Dome” (Golden Dome) is a home-grown layered missile defense shield concept promoted by the US Department of Defense. The goal is to integrate “space-based (satellite) detection/command and control + space-based or near-sky interception+ multi-layer ground-based interception/radar” to intercept incoming missiles as early as possible (including before and after entering space) to deal with multiple types of threats, including intercontinental ballistic missiles, hypersonic speed, and cruise missiles; its scale and complexity are described as far exceeding Israel's “Iron Dome”. The “Golden Dome Project” was led by the US Department of Defense (Pentagon) and the US Space Force (Space Force).

In addition to L3 Harris, the core participants in the “Golden Dome Project” mainly include traditional defense contractors/system integration operators, including Lockheed Martin, Northrop Grumman, Raytheon RTX (Raytheon), and Boeing, as well as emerging defense and military forces such as Anduril and True Anomaly.

How sacred is L3Harris Technologies?

According to information, AE Industrial currently has a number of major space-related investments or asset portfolios, including well-known satellite manufacturer York Space Systems, satellite component company Redwire, and Firefly Aerospace; of these, Firefly Aerospace was listed and traded on the US stock market last year. Therefore, for AE Industrial, owning a partial stake in a set of aerospace propulsion assets belonging to L3Harris Technologies may also have a significant synergy effect with the private equity giant's existing aerospace investments.

According to people familiar with the matter, L3Harris plans to use the proceeds to invest in large-scale production capacity for rocket engines and critical missiles, as well as general corporate purposes; part of the money may be used to repay debts.

Demand for missiles has surged due to the Russian-Ukrainian war and the increasingly intense geopolitical conflict in the Middle East, and military forces around the world are seeking to replenish their missile stocks, thus continuing to benefit defense and military contractors such as L3Harris.

Since the merger of L3 and Harris in 2018, as part of the major defense and military company's streamlined operations around core defense capabilities, this partial divestment of the space propulsion asset portfolio will result in a cumulative divestment of more than $4 billion in assets.

Two people familiar with the matter said that the major deal in the defense and military industry is expected to be officially completed in the second half of 2026, but it still needs to meet the usual delivery conditions.

The deal continued L3Harris's strategic transformation to a “core missile-focused operation” and gradually moved away from certain aerospace and NASA-oriented businesses; however, the company served far more customers than the US Department of Defense.

L3Harris is a major US defense technology and space contractor. Its core customers are mainly the US Department of Defense and allied governments, and also cover some civil/space projects (including NASA-related businesses). Its business priorities include large-scale mission system integration (ISR/electronic systems, etc.), missile and air defense and anti-missile chains, space and airborne systems, communication systems, and related capabilities such as propulsion/rocket engines and solid rocket engines (through acquisition and integration).

The latest asset disposal led by L3Harris can be described as optimizing the structure of space assets — retaining key engine assets and strategic capabilities (RS-25, etc.), and introducing some of the more scattered, longer-cycle propulsion/space exploration lines into private equity partners with strong integration capabilities in exchange for cash and strategic focus space, and concentrating resources on a more defined demand curve of “missile and rocket engine production capacity”, and striving to shift capital from space exploration projects with longer cycles/higher uncertainty to anti-aircraft missile and anti-aircraft defense projects with more fixed orders, faster turnover, and higher policy priorities Guide chain.