Honeywell to Split into Three Public Companies: Automation, Aerospace, Advanced Materials
Honeywell International (HON) will divide into three publicly traded entities: Honeywell Automation, Honeywell Aerospace, and Advanced Materials.
Automation: Focuses on building automation technology.
Aerospace: Specializes in technology for aircraft cockpits and other aerospace applications.
Advanced Materials: Provides solutions for industries such as healthcare, electronics, and transportation.
The separation is expected to be completed in the second half of 2026.
Rationale:
Honeywell believes that splitting into specialized companies will:
* Unlock growth potential for each business through tailored strategies.
* Enhance strategic alignment and operational efficiency.
* Create significant value for shareholders.
Background:
* Speculation about the split had been ongoing for months.
* Announcement comes amid pressure from activist investor Elliott Management.
* Honeywell's stock initially dropped over 4% after the news, reflecting investor concerns.
CEO Vimal Kapur's Perspective:
"The formation of three independent, industry-leading companies... positions each to pursue tailored growth strategies and unlock significant value for shareholders and customers."
Market Valuation Potential:
Analysts estimate Honeywell could be worth $330 per share after the breakup, compared to its current price of around $212.
Industry Context:
Honeywell's decision follows a trend of industrial conglomerates splitting up to focus on specialized operations, such as General Electric's breakup in 2024.