Honeywell to Split Automation and Aerospace Businesses

Honeywell has announced its plan to separate its Automation and Aerospace businesses, creating three independent companies. This decision follows a year-long evaluation by the company’s Board of Directors and CEO Vimal Kapur. The separation is expected to be completed in the second half of 2026 in a tax-free manner for shareholders. This move, along with the previously announced spin-off of the Advanced Materials division, aims to establish three strong, publicly traded businesses with distinct strategies and growth opportunities.

CEO Vimal Kapur stated, "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. 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 Automation will focus on developing next-generation buildings and industrial systems using process technology, software, and AI-driven solutions. The business aims to drive productivity, sustainability, and safety across various industries.

Kapur explained, "Building on decades of innovation as its heritage, Honeywell Automation will create the buildings and industrial infrastructure of the future, leveraging process technology, software, and AI-enabled, autonomous solutions to drive the next generation of productivity, sustainability and safety for our customers. 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."

Meanwhile, Honeywell Aerospace will become a dedicated aviation technology company, providing essential systems for commercial and defence aircraft worldwide. It had $15 billion in revenue in 2024 and is expected to benefit from growing demand in the aviation sector.

Kapur highlighted, "As Aerospace prepares for unprecedented demand in the years ahead across both commercial and defense markets, now is the right time for the business to begin its own journey 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."

The Advanced Materials division will operate as a standalone chemicals and materials company focused on sustainability. With $4 billion in annual revenue, it will provide innovative solutions in fluorine products, electronic materials, fibres, and healthcare packaging. Its portfolio includes Solstice® hydrofluoro-olefin (HFO) technology, known for its low global warming potential.

Elliott Partners, a major investor, supports this strategic move. Their representatives, Marc Steinberg and Jesse Cohn, stated, "With today's action, Honeywell will be separating its Automation and Aerospace businesses into two market-leading enterprises poised for sustained growth and value creation. The enhanced focus, alignment, and strategic agility enabled by this separation will allow Honeywell to realize the opportunity for operational improvement and valuation upside. We look forward to continuing to support Vimal and the management team as they execute on the separation and deliver significant long-term value to Honeywell's shareholders."

By splitting into three companies, Honeywell aims to enhance focus, improve financial flexibility, and allow each business to pursue its own strategic priorities. Each company will have a dedicated management team and board, helping to drive innovation and create long-term value for shareholders.

Source: Honeywell International Inc.