CHARLOTTE, N.C. - Honeywell International Inc. (NASDAQ: NASDAQ:HON), currently valued at $144.6 billion and maintaining a GOOD financial health score according to InvestingPro, has announced its plan to separate into three distinct, publicly traded companies, focusing on Automation, Aerospace, and Advanced Materials. This strategic move, set for the second half of 2026, is designed to be tax-free to shareholders and aims to capitalize on individual growth opportunities for each sector. The company’s current market position reflects its strength, with a solid dividend history spanning 40 consecutive years.
The decision, a result of a year-long comprehensive portfolio evaluation, will see Honeywell Automation emerge as a leader in the transition from automation to autonomy, with projected 2024 revenues of $18 billion. The company will focus on connecting assets, people, and processes to power digital transformation across various industries. Based on InvestingPro analysis, Honeywell currently trades at a P/E ratio of 25.6x, suggesting a premium valuation relative to near-term earnings growth. InvestingPro subscribers have access to 12 additional key insights about Honeywell’s valuation and growth prospects.
Honeywell Aerospace, with 2024 revenues estimated at $15 billion, will become a major player in the aerospace sector, providing technology and solutions for commercial and defense aircraft. The company anticipates increased demand and aims to lead in the electrification and autonomy of flight.
The Advanced Materials business is expected to complete its spin-off by late 2025 or early 2026. It will specialize in sustainability-focused specialty chemicals and materials, including groundbreaking Solstice® hydrofluoro-olefin technology, and had nearly $4 billion in revenue last year.
Vimal Kapur, Chairman and CEO of Honeywell, emphasized the potential for tailored growth strategies and significant value creation for shareholders and customers. The company has already committed to deploying at least $25 billion toward capital expenditures, dividends, share repurchases, and acquisitions through 2025.
Goldman Sachs (NYSE:GS) & Co. LLC and Centerview Partners LLC provided financial advice, while Skadden, Arps, Slate, Meagher & Flom LLP offered legal counsel for the strategic review. Honeywell will discuss the separation details during an investor conference call today.
Based on a press release statement, Honeywell, a company aligned with megatrends like automation, aviation, and energy transition, continues to optimize its portfolio to enhance value propositions for each business. With current revenue of $37.85 billion and a strong return on equity of 33%, the company demonstrates robust operational performance. The planned separations are subject to customary conditions, including regulatory approvals and final board approval. For detailed analysis and comprehensive insights, investors can access Honeywell’s complete Pro Research Report, available exclusively on InvestingPro, which covers all crucial aspects of this strategic transformation.
In other recent news, Honeywell has announced a series of strategic moves and partnerships. The company plans to separate its Automation and Aerospace Technologies divisions, a process expected to conclude by the second half of 2026. This decision, coupled with a previously announced plan to spin off Advanced Materials, will result in three independent, publicly traded entities. Each company is expected to pursue tailored growth strategies and unlock significant value for shareholders and customers.
In addition, Honeywell’s Jeppesen navigation unit has attracted interest from major aviation suppliers and private equity firms, including RTX Corp and Honeywell International Inc. The potential sale of this unit is part of Boeing (NYSE:BA)’s strategy to streamline its operations and focus on its core businesses.
Honeywell also plans to split into two public companies, one focusing on automation and the other on aerospace and defense, following pressure from Elliott Investment Management. This decision is expected to be formally announced along with the company’s fourth-quarter earnings in early February.
Moreover, Honeywell has expanded its partnership with NXP Semiconductors (NASDAQ:NXPI) to accelerate the development of aviation products and pave the way for autonomous flight. This collaboration aims to enhance operational efficiency and safety in aviation, and is expected to drive significant customer outcomes and fuel Honeywell’s growth.
Lastly, Honeywell has appointed Stacey Bernards as Senior Vice President, Head of Global Government Relations, effective March 1, 2025. Bernards will be taking over from the retiring Jim Carroll. These recent developments reflect Honeywell’s ongoing efforts to restructure its portfolio, streamline its holdings, and focus on providing innovative solutions to complex global challenges.
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