Honeywell International (HON, Financials) announced plans to separate into three independent, publicly traded companies, aiming to enhance strategic focus and unlock shareholder value.
The action will split the company's main divisions: Advanced Materials, Aerospace, and Automation.
Planned to be tax-free for stockholders, the Automation and Aerospace businesses are scheduled for a split by the second half of 2026. Expected to finish by the end of 2025 or early 2026, this follows the previously stated spin-off of the Advanced Materials division.
Having a worldwide scope and a large installed base, Honeywell Automation will become a pure-play leader in automation. This section recorded $18 billion in sales in 2024. To boost production, sustainability, and safety across several sectors, the business intends to use process technology, software, and AI-enabled solutions.
With $15 billion in sales in 2024, Honeywell Aerospace will rise to be a top technology and systems supplier helping aviation all over to flourish. Serving key customers like Boeing and Airbus, the business provides aircraft propulsion, cockpit and navigation systems, and auxiliary power units.
Generating about $4 billion in 2024, the Advanced Materials company will concentrate on specialized chemicals and materials with an eye on sustainability.
Under pressure from activist investor Elliott Investment Management, which owns a sizable share in Honeywell, this strategic realignment is occurring. The company has argued for this kind of split to improve operational concentration and shareholder returns.
Vimal Kapur, the CEO of Honeywell, said that the founding of three distinct businesses strengthens the company's basis and helps each to follow customized development plans and release major value for consumers and investors.
This action helps Honeywell fit a larger trend of industrial giants simplifying processes to improve market competitiveness. General Electric recently went through a similar split, which benefited its newly established companies greatly.
Customary requirements apply to the intended separations, including governmental clearances and board of directors' final support of Honeywell. Through 2025, the corporation is still dedicated to spending at least $25 billion on capital projects, dividends, share repurchases, and acquisitions.
