Atlantic Research Corp. yesterday announced plans to form a joint-venture company in pursuit of a multimillion-dollar contract to create the next generation of solid rocket motors for the space shuttle.

The Alexandria rocket maker has signed a preliminary agreement with Hercules Aerospace Co. of Wilmington to compete for the design and production of the Advanced Solid Rocket Motor (ASRM), a key component of NASA's shuttle program.

Financial terms of the venture were not disclosed.

The solid rocket motors that have been used in the shuttle program are made exclusively by Morton-Thiokol Inc. One of that company's rockets malfunctioned during last year's fatal Challenger flight.

The tentative joint venture agreement, subject to the approval of the directors of the two companies, marks "a most significant development" in the space-flight business, said Eliot H. Benson, an aerospace industries analyst at Ferris & Co. Inc. of Washington.

With defense and related federal budgets under attack, more joint ventures of the type proposed by ARC and Hercules will be needed, Benson said.

"This could become a trend, because there is an increased need to share the costs and spread the business risks" of aerospace development, Benson said. "I think, in the future, we're going to see significant joint ventures by more aerospace companies."

The proposed ARC-Hercules venture represents a combination of strengths, because ARC has expertise in solid-rocket propellants and Hercules has talent in large-rocket development, Benson said.

ARC was acquired earlier this month in a $237 million hostile takeover by Sequa Corp., a $1.2 billion-a-year New York conglomerate. Sequa has not yet begun running the Alexandria company, ARC officials said.

But, as far as the ARC-Hercules venture is concerned, "We believe that Sequa will be as excited about this as we are," said James Sides, who is in charge of ARC's product development programs.