WASHINGTON — Chris Kubasik, CEO of defense contractor L3Harris Technologies, on July 27 extended “a warm welcome to Aerojet’s team of over 5,000 employees who will soon become part of L3Harris.”
After clearing regulatory approvals, L3Harris officially acquired Aerojet Rocketdyne, the last independent U.S. supplier of missile propulsion systems.
Aerojet Rocketdyne, headquartered in El Segundo, California, makes rocket engines and propulsion systems for space vehicles, ballistic missiles and military tactical weapons.
The completion of the $4.7 billion deal caps a period of uncertainty for Aerojet Rocketdyne that started in December 2020 when Lockheed Martin sought to buy it for $4.4 billion. That acquisition was blocked by the Federal Trade Commission.
During an earnings call with analysts July 27, Kubasik said the takeover of Aerojet “represents a pivotal moment for both our company and the defense industry and is poised to generate shareholder value beyond initial expectations.”
L3Harris will benefit from the demand for munitions fueled by the Ukraine war. The Defense Department in April announced it would provide Aerojet Rocketdyne $215.6 million to expand its rocket propulsion manufacturing facilities in order to speed up production of missiles for Ukraine.
“Budgets are increasing for munitions, and the DoD has committed Defense Production Act funding for the expansion and modernization of Aerojet Rocketdyne’s operations,” said Kubasik.
In its final social media post as an independent company, Aerojet Rocketdyne said: “We’re now part of L3Harris Technologies, where we’ll continue our innovations under its umbrella.”
‘Assurances to DoD’
The FTC last year blocked Lockheed Martin’s bid for Aerojet Rocketdyne, arguing that the combination would give Lockheed — a major supplier of tactical missiles — the ability to “cut off other defense contractors from the critical components they need to build competing missiles.”
Kubasik said L3Harris plans to make Aerojet’s propulsion systems available to all DoD contractors.
“We gave assurances to the DoD that we would be a merchant supplier of rocket motors and rocket engines,” he told analysts. “I can assure you we are highly motivated to sell rocket engines and rocket motors to anyone who wants to buy them within the rules globally.”
The $215 million Defense Production Act funds, said Kubasik, will be spent to upgrade facilities and make munitions, “but there’s also money in there to digitize their engineering. So we’re quite excited about that.”