Industrial giant Honeywell announces split into 3 companies after investor pressure
Industrial giant Honeywell announces split into 3 companies after investor pressure
Aerospace titan Honeywell announced Thursday that it will split into three independent and publicly traded companies.
The company said that it will create Honeywell Automation and Honeywell Aerospace, in addition to a previously announced spin off of Advanced Materials.
"The formation of three independent, industry-leading companies builds on the powerful foundation we have created, positioning each to pursue tailored growth strategies, and unlock significant value for shareholders and customers," Vimal Kapur, Chairman and CEO of Honeywell, said in a press release.
The company said that the separation of the two newly announced companies will be completed in the second half of 2026 and will be tax-free to Honeywell shareholders. The spin-off of the Advanced Materials company is expected to be completed by the end of 2025 or early in 2026.
What will the new companies do?
Here's what the three new companies will do:
Honeywell Automation: The company will provide automation solutions, including helping factories and warehouses mechanize their operations. The sector has been grappling with sluggish demand as a pandemic-driven boom in e-commerce moderates.
The company will provide automation solutions, including helping factories and warehouses mechanize their operations. The sector has been grappling with sluggish demand as a pandemic-driven boom in e-commerce moderates. Honeywell Aerospace: The company will be a "pure play aerospace" supplier. The aerospace unit is Honeywell's biggest revenue generator, accounting for about 40% of the company's total revenue in 2024, and counts Boeing and Airbus among its customers.
The company will be a "pure play aerospace" supplier. The aerospace unit is Honeywell's biggest revenue generator, accounting for about 40% of the company's total revenue in 2024, and counts Boeing and Airbus among its customers. Advanced Materials: Honeywell said that Advanced Materials will be "a sustainability-focused specialty chemicals and materials" company. The announcement said that the sector brought in nearly $4 billion in revenue last year.
Split comes after activist investor pressure
The split comes just months after activist investor Elliott Management took a $5 billion stake in the industrial giant.
Despite several smaller moves, Elliott, whose stake in Honeywell is its largest single investment, argued the company needed to split.
Honeywell attracted the activist investor's attention as its stock price underperformed the market. Its shares had risen 7.7% in 2024 until Nov. 11, a day before Elliott disclosed its position, while the broader market had gained 26.6% in the same period.
Elliott's push is not the first time Honeywell has faced activist pressure to break up the company. In 2017, it managed to shrug off Daniel Loeb's Third Point, which urged the company to spin off its aerospace division.
Contributing: Reuters
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