Here's Why L3Harris' Latest Merger Gambit Will Pay Off for Investors

Defense contractor L3Harris Technologies (NYSE: LHX) is making a bold bet with its planned $4.7 billion acquisition of Aerojet Rocketdyne (NYSE: AJRD), paying up to win a bidding war for the maker of rockets and other propulsion systems. For L3Harris, the deal continues a flurry of M&A moves since the company's formation in 2019 following the merger of L3 Technologies and Harris Corp. L3Harris is paying a premium to what Aerojet was offered by Lockheed Martin just more than a year ago, despite Aerojet being viewed as a wounded company in need of a partner after that Lockheed deal fell apart due to regulatory concerns. While there are risks to this transaction, especially in the near term, the deal is a solid move for L3Harris and can be an important step in the company's bid to establish itself among the nation's top defense contractors.