L3Harris stock rises on proposed $1B Department of Defense investment

[L3Harris building in Burlington, Canada.]
JHVEPhoto/iStock Editorial via Getty Images

L3Harris Technologies (LHX [https://seekingalpha.com/symbol/LHX]) shares popped 14% premarket on Tuesday after the defense contractor announced a proposed $1B investment from the U.S. Department of Defense to significantly increase capacity to build solid rocket motors that power vital U.S. and allied missiles.

L3Harris and the defense agency have agreed to a proposed $1 billion investment in L3Harris’ Missile Solutions business through a convertible preferred security that would convert into common shares upon an IPO.

Under the deal, L3Harris plans to take the Missile Solutions unit public in the second half of 2026, creating a standalone company focused on critical propulsion systems.

“We’re taking action to build today’s ‘Arsenal of Freedom’ by launching a pure-play missile solutions provider,” said Christopher Kubasik, chairman and CEO, L3Harris. “Recent Trump Administration actions have placed renewed emphasis on strengthening the defense industrial base and reinvigorating competition following a 30-year wave of consolidation. Building on several years of sustained investment and operational improvements by L3Harris, this new company will serve as a key partner to the DoW in supporting efforts to deter and defeat America’s adversaries.”

Following these transactions, L3Harris (LHX [https://seekingalpha.com/symbol/LHX]) will retain a controlling interest in the Missile Solutions business. The company will host an investor conference to discuss the partnership at 9 AM ET today.

Other defense contractors, including General Dynamics (GD [https://seekingalpha.com/symbol/GD]), RTX (RTX [https://seekingalpha.com/symbol/RTX]), Lockheed Martin (LMT [https://seekingalpha.com/symbol/LMT]) and Northrop Grumman (NOC [https://seekingalpha.com/symbol/NOC]), were all up marginally.

DEFENSE ETFS: (ITA [https://seekingalpha.com/symbol/ITA]), (PPA [https://seekingalpha.com/symbol/PPA]), (XAR [https://seekingalpha.com/symbol/XAR]), (SHLD [https://seekingalpha.com/symbol/SHLD]), (DFEN [https://seekingalpha.com/symbol/DFEN]), (EUAD [https://seekingalpha.com/symbol/EUAD]), (MISL [https://seekingalpha.com/symbol/MISL]), (WDGF [https://seekingalpha.com/symbol/WDGF]), (WDEF [https://seekingalpha.com/symbol/WDEF]), (WDAF [https://seekingalpha.com/symbol/WDAF]), (FITE [https://seekingalpha.com/symbol/FITE]), (WAR [https://seekingalpha.com/symbol/WAR]), and (NATO [https://seekingalpha.com/symbol/NATO]).

Source: Press Release [https://seekingalpha.com/pr/20361745-l3harris-accelerates-arsenal-of-freedom-with-creation-of-a-new-missile-solutions-company]

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