Christopher Kubasik

Money Moves

Leading spinoff of Missile Solutions business

For three decades, the Pentagon told defense contractors to consolidate. Now it's paying $1 billion to help one spin off—and the strategy is cascading across the entire defense industrial base. The Defense Department announced in January 2026 it will take an equity stake in L3Harris's solid rocket motor business, which will become a separate publicly traded company in the second half of 2026. It's the first time the Pentagon has directly invested in a defense supplier rather than simply buying its products. By early February, the model had already proven its power: Congress passed an $838.7 billion FY2026 defense budget with $2.9 billion earmarked specifically for munitions and industrial capacity expansion, and Raytheon announced five landmark framework agreements to triple Tomahawk production and double AMRAAM output over seven years.

Updated Feb 5