Honeywell to Unlock Value with High-Performance Materials Spin-Off by 2026

Honeywell International Inc. recently announced plans to spin off its high-performance materials business into an independent, publicly traded company in the United States, expected to be completed by late 2025 or early 2026. The intent is to conduct this spin-off in a tax-free manner for shareholders.

The move aims to create a company focused exclusively on innovative and sustainable specialty chemicals and materials. The new entity is projected to generate revenue between $3.7 billion and $3.9 billion for the 2024 fiscal year, with an EBITDA margin expected to exceed 25%. This separation will allow Honeywell to maintain its financial forecast for 2024, with a keener focus on its core sectors: automation, future aviation, and energy transition.

CEO Vimal Kapur emphasized that this spin-off aligns with Honeywell's strategy to refine its portfolio. By focusing on innovation, the new company is expected to generate groundbreaking, sustainable solutions, thus creating value for shareholders. Kapur stated, "This strategic move positions us to leverage our leading technology and strong customer relationships in the market for specialty chemicals and materials."

Prior to this announcement, Honeywell completed several acquisitions, including Air Products' LNG business and other technology ventures, contributing to its strategy of high-return capital investment. The company has committed to allocating $90 billion in acquisitions through 2024, demonstrating its focus on strategic growth.

Post spin-off, the high-performance materials business will hold a leadership position in the fields of fluorine products, electronic materials, industrial fibers, and medical packaging solutions. Key technologies include Solstice® hydrofluoroolefin (HFO) technology, Spectra® fibers, Hydranal® reagents, and Aclar® pharmaceutical packaging materials.

The spin-off is contingent upon standard closing conditions, which includes obtaining approvals from the SEC and relevant regulatory bodies, and the final endorsement by Honeywell's board. The process is structured to not require the approval of Honeywell's shareholders and aims to reinforce value for all stakeholders involved.