Honeywell (HON.US) to Split into Three Companies, Emulating General Electric's Strategy

Intellidex has learned that Honeywell (HON.US) is planning to split into three independent companies, according to reports. The industrial giant is expected to announce its decision to separate its aerospace division from its automation business on Thursday, while continuing to push forward with the planned spinoff of its advanced materials division. About a year ago, Honeywell's board and CEO Vimal Kapur launched a strategic review. The company faced growing pressure from activist investor Elliott Investment Management. Last year, Elliott pushed for a spinoff, citing General Electric's successful restructuring. Earlier, General Electric decided to split into three independent businesses - focusing on aerospace, energy, and healthcare - a decision that greatly boosted its value, with the aerospace division currently valued at about $215bn. Honeywell, currently valued at about $150bn, has lagged the market and become a target for investors. The report said the planned spinoffs are aimed at improving financial flexibility and simplifying the management of each business. Kapur, who became CEO in June 2023, has already begun reshaping the company, announcing plans to spin off the advanced materials division and divest its personal protective equipment business. Honeywell has also been seeking acquisitions, spending about $10bn on deals over the past two years, including a $5bn acquisition of a safety business and a $2bn acquisition of aerospace and defense technology. The spinoffs are expected to be completed by the second half of 2026, according to reports. About 40 per cent of Honeywell's revenue comes from aerospace, providing engines and cockpit systems for Boeing (BA.US) and other manufacturers. While demand in aerospace is strong, its industrial and building automation divisions have lagged, dragging down profits. The independent Honeywell aerospace business will become one of the largest publicly listed aerospace suppliers, with revenue of $15bn in 2024. The automation business generated $18bn in revenue last year, while the advanced materials division is about $4bn. After the spinoffs, Honeywell is expected to continue its smaller acquisition strategy to strengthen its new independent businesses.