The industrial giant announced plans to break up its conglomerate into three distinct companies focused on automation, aerospace and advanced materials, respectively.
Honeywell has announced plans to separate into three distinct companies, the latest in a string of massive industrial conglomerates to split up, including 3M, GE and United Technologies.
Chairman and CEO Vimal Kapur on February 6 announced the plan to pursue a full separation of Automation and Aerospace Technologies, adding to the previously announced plan to spin-off Advanced Materials,
The move will result in three publicly listed companies with distinct strategies and growth drivers. The company said in a press release that the separation is intended to be completed in the second half of 2026 and will be done in a manner that is tax-free to Honeywell shareholders.
“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,” said Vimal Kapur, Chairman and CEO of Honeywell. “Our simplification of Honeywell has rapidly advanced over the past year, and we will continue to shape our portfolio to create further shareholder value. We have a rich pipeline of strategic bolt-on acquisition targets, and we plan to continue deploying capital to further enhance each business as we prepare them to become leading, independent public companies.”
Honeywell says the planned separations of automation, aerospace and advanced materials will deliver a slew of benefits, including simplified strategic focus and greater financial flexibility to pursue distinct organic growth opportunities through investment.
Honeywell Automation will create the buildings and industrial infrastructure of the future, leveraging process technology, software, and AI-enabled, autonomous solutions, said Kapur. “As a standalone company with a simplified operating structure and enhanced focus, Honeywell Automation will be better able to capitalize on the global megatrends underpinning its business, from energy security and sustainability to digitalization and artificial intelligence.”
Honeywell says it’s aerospace company will see unprecedented demand in the years ahead from commercial and defense markets, making it the right time for the business to operate as a standalone, public company. “Today’s announcement is the culmination of more than a century of innovation and investment in leading technologies from Honeywell Aerospace that have revolutionized the aviation industry several times over. This next step will further enable the business to continue to lead the future of aviation.”
Here’s a look at how each of the three new companies will operate:
Honeywell Automation: Positioned for the industrial world’s transition from automation to autonomy, with a comprehensive portfolio of technologies, solutions, and software to drive customers’ productivity. Honeywell Automation will maintain its global scale, with 2024 revenue of $18 billion. Honeywell Automation will connect assets, people and processes to push digital transformation.
Honeywell Aerospace: Its technology and solutions are used on virtually every commercial and defense aircraft platform worldwide and include aircraft propulsion, cockpit and navigation systems, and auxiliary power systems. With $15 billion in annual revenue in 2024 and a large, global installed base, Honeywell Aerospace will be one of the largest publicly traded, pure play aerospace suppliers.
Advanced Materials: This business will be a sustainability-focused specialty chemicals and materials company with a focus on fluorine products, electronic materials, industrial grade fibers, and healthcare packaging. With nearly $4 billion in revenue last year, Advanced Materials offers leading technologies with premier brands, including its low global warming Solstice hydrofluoro-olefin (HFO) technology.
Honeywell says it remains on pace to exceed its commitment to deploy at least $25 billion toward high-return capital expenditures, dividends, opportunistic share purchases and accretive acquisitions through 2025. The company says it will continue its portfolio transformation efforts during the separation planning process.
Since December 2023, Honeywell has announced a number of strategic actions with about $9 billion of accretive acquisitions, including the Access Solutions business from Carrier Global, Civitanavi Systems, CAES Systems, and the liquefied natural gas (LNG) business from Air Products. Honeywell will continue with its planned divestment of its Personal Protective Equipment business, which is expected to close in the first half of 2025.
