Industrial Giant Honeywell to Split into Three Independent Companies
Honeywell (HON), a leading industrial conglomerate, has announced plans to split into three separate publicly traded companies: Honeywell Automation, Honeywell Aerospace, and Advanced Materials. The separation is expected to take place in the second half of 2026.
Reason for the Separation
The breakup aims to create three focused businesses with tailored growth strategies. Honeywell Automation will specialize in building automation technology, Aerospace will focus on cockpit technology, and Advanced Materials will provide solutions for sectors like healthcare.
Market Response
Honeywell shares initially declined by over 4% on the news as investors assessed the impact of the split. Analysts estimate that the three companies could have a combined value of approximately $330 per share, significantly higher than the current market price.
Key Figures
Vimal Kapur, Honeywell's Chairman and CEO, played a pivotal role in the decision. Kapur joined the company in 1989 and has overseen numerous acquisitions and company overhauls.
Elliott Management, an activist investor with a $5 billion stake in Honeywell, provided support for the separation. Elliott believes the move will enhance focus, strategic agility, and operational improvement.
Impact on the Industrial Sector
The Honeywell split follows a similar breakup of General Electric (GE) in 2024. This trend suggests a shift in the industrial sector, where conglomerates are facing pressure to streamline and focus on specific market segments.