Honeywell has announced the completion of a comprehensive business portfolio evaluation launched a year ago by Chairman and CEO Vimal Kapur and intends to pursue a full separation of Automation and Aerospace Technologies.

The planned separation, coupled with the previously announced plan to spin Advanced Materials, will result in three publicly listed companies with distinct strategies and growth drivers. The separation is intended to be completed in the second half of 2026 and 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,” Kapur said. “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.”

The planned separations of Automation, Aerospace and Advanced Materials will create value for all stakeholders as each will benefit from:

• Simplified strategic focus;
• Greater financial flexibility to pursue distinct organic growth opportunities throughout investment cycles;
• Improved ability to tailor capital allocation priorities in alignment with strategic focus;
• Focused boards of directors and management teams with deep domain expertise; and
• Distinct investment profiles that position each company to unlock greater long-term value for shareholders.

Following the completion of the announced transactions, Honeywell intends to be a global leader of the industrial world’s transition from automation to autonomy, with a comprehensive portfolio of technologies, solutions, and software to drive customers’ productivity, according to the company.

Since December 2023, Honeywell has announced a number of strategic actions to drive organic growth and simplify its portfolio, including approximately $9 billion of accretive acquisitions, such as the Access Solutions business from Carrier Global, which was completed in June 2024.

Honeywell Automation will maintain global scale, with 2024 revenue of $18 billion. Honeywell Automation will connect assets, people and processes to power digital transformation, building on decades-long technology leadership positions, deep domain experience, and a vast installed base to serve a variety of high-growth verticals.

“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,” Kapur stated. “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.”

In November, investor group Elliott Investment Management, which has a $5 billion investment in Honeywell, sent a letter to its board of directors calling for the company to simplify its conglomerate structure, recommending that Automation and Aerospace be separate entities and be better positioned to thrive operationally.

Honeywell 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 intends to continue its portfolio transformation efforts during the separation planning process to enhance the value proposition of each business.

“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,” noted Elliott Partner Marc Steinberg and Managing Partner Jesse Cohn. “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.”