Honeywell Undergoes Strategic Portfolio Realignment and Acquisition Analysis
Portfolio Realignment
Honeywell CEO Vimal Kapur outlined plans to transform the company into a "growth-oriented company" by aligning its portfolio with end markets and innovative products. This shift aims to drive future growth and enhance capabilities.
Acquisition Review
Honeywell has announced its intention to spin off its advanced material business to enhance its valuation. The spin-off, expected to be completed in late 2025 or early 2026, will create a separate publicly traded entity with annual revenue of approximately $3.8 billion.
Activist Pressure
Elliott Management, an activist investor with a significant stake in Honeywell, has reportedly pressured the company to consider further portfolio adjustments.
Potential Split-Up
Honeywell is reportedly exploring the possibility of splitting into two separate publicly traded entities: one focused on its automation division and the other on its aerospace business.
Analyst Estimates
Industry analyst Stephen Tusa estimates that Honeywell could fetch a value of $330 per share if broken up, significantly higher than its current trading price of around $223.
Company Response
CEO Vimal Kapur acknowledged the need for periodic portfolio reviews and indicated that the company's board is evaluating all options for value creation, including those proposed by activists.