Honeywell finished its comprehensive business portfolio evaluation, which it launched a year ago. | Source: Honeywell
Honeywell International Inc. announced today that it plans to spin out its automation and aerospace businesses. This separation, paired with the company’s already announced plans to spin out Advanced Materials, will result in three publicly listed companies with distinct strategies.
The Charlotte, N.C.-based company plans to complete the separation in the second half of 2026. Meanwhile, it expects its Advanced Materials business to complete separation by the end of 2025 or early 2026.
“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,” stated 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,” he added. “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 outlined several potential benefits of separating its automation, aerospace, and advanced materials businesses. It said each company will benefit from a simplified strategic focus and greater financial flexibility to pursue organic growth opportunities through investment cycles. In addition, each company will be able to tailor capital allocation priorities in alignment with its strategic focus.
The Honeywell spinoffs will also have more focused boards of directors and management teams with deep domain expertise. The company claimed that they’ll benefit from distance investment profiles that position each one to unlock unique long-term value for its stakeholders.
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Preview Automation, Aerospace, Advanced Materials
Following the completion of the transactions, Honeywell Automation will focus on transitioning from automation to autonomy. It will provide hardware and software to improve productivity for customers in industries such as manufacturing and logistics.
Honeywell Automation will maintain a global scale, with a 2024 revenue of $18 billion. The company will connect assets, people, and processes to power digital transformation. The parent company also said it will build on Honeywell’s “decades-long technology leadership positions, deep domain experience, and a vast installed base to serve a variety of high-growth verticals.”
Honeywell Aerospace already has technology deployed on virtually every commercial and defense aircraft platform worldwide. Its offerings 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 will be a sustainability-focused specialty chemicals and materials pure play, said Honeywell. This company has leading positions across fluorine products, electronic materials, industrial-grade fibers, and healthcare packaging solutions. With nearly $4 billion in revenue last year, Advanced Materials’ offerings include the Solstice hydrofluoro-olefin (HFO) technology to reduce contributing to global warming.
As a standalone company with a large-scale domestic manufacturing base, Advanced Materials could benefit from a compelling investment profile and a more flexible and optimized capital allocation strategy, Honeywell said.
Honeywell aims for organic growth and a simplified portfolio
Since December 2023, Honeywell has announced several strategic actions to drive organic growth and simplify its portfolio. This includes approximately $9 billion of accretive acquisitions: the Access Solutions business from Carrier Global, Civitanavi Systems, CAES Systemsand the liquefied natural gas (LNG) business from Air Products.
In addition, the company entered into an agreement to divest its Personal Protective Equipment business, which is expected to close in the first half of 2025. Honeywell said the breakup will happen a manner that is tax-free to Honeywell shareholders.
The company is continuing to execute its previously announced spin-off of its Advanced Materials business. It expects to complete this by the end of 2025 or early in 2026. Honeywell said the three independent companies will be appropriately capitalized with the financial flexibility to take advantage of future growth opportunities. It said it expects Honeywell Automation and Honeywell Aerospace to each maintain a strong investment-grade credit rating.
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