Honeywell completed its complete enterprise portfolio analysis, which it launched a yr in the past. | Source: Honeywell
Honeywell International Inc. introduced immediately that it plans to spin out its automation and aerospace companies. This separation, paired with the corporate’s already introduced plans to spin out Advanced Materials, will lead to three publicly listed firms with distinct methods.
The Charlotte, N.C.-based firm plans to finish the separation within the second half of 2026. Meanwhile, it expects its Advanced Materials enterprise to finish separation by the tip 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,” said 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 a number of potential advantages of separating its automation, aerospace, and superior supplies companies. It stated every firm will profit from a simplified strategic focus and better monetary flexibility to pursue natural development alternatives via funding cycles. In addition, every firm will have the ability to tailor capital allocation priorities in alignment with its strategic focus.
The Honeywell spinoffs will even have extra centered boards of administrators and administration groups with deep area experience. The firm claimed that they’ll profit from distance funding profiles that place each to unlock distinctive long-term worth for its stakeholders.
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Preview Automation, Aerospace, Advanced Materials
Following the completion of the transactions, Honeywell Automation will concentrate on transitioning from automation to autonomy. It will present {hardware} and software program to enhance productiveness for purchasers in industries corresponding to manufacturing and logistics.
Honeywell Automation will preserve a worldwide scale, with a 2024 income of $18 billion. The firm will join belongings, folks, and processes to energy digital transformation. The father or mother firm additionally stated it can construct 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 expertise deployed on just about each business and protection plane platform worldwide. Its choices embody plane propulsion, cockpit and navigation techniques, and auxiliary energy techniques.
With $15 billion in annual income in 2024 and a big, international put in base, Honeywell Aerospace can be one of many largest publicly traded, pure-play aerospace suppliers.
Advanced Materials can be a sustainability-focused specialty chemical substances and supplies pure play, stated Honeywell. This firm has main positions throughout fluorine merchandise, digital supplies, industrial-grade fibers, and healthcare packaging options. With practically $4 billion in income final yr, Advanced Materials’ choices embody the Solstice hydrofluoro-olefin (HFO) expertise to scale back contributing to international warming.
As a standalone firm with a large-scale home manufacturing base, Advanced Materials may benefit from a compelling funding profile and a extra versatile and optimized capital allocation technique, Honeywell stated.
Honeywell goals for natural development and a simplified portfolio
Since December 2023, Honeywell has introduced a number of strategic actions to drive natural development and simplify its portfolio. This contains roughly $9 billion of accretive acquisitions: the Access Solutions enterprise from Carrier Global, Civitanavi Systems, CAES Systems, and the liquefied pure fuel (LNG) enterprise from Air Products.
In addition, the corporate entered into an settlement to divest its Personal Protective Equipment enterprise, which is anticipated to shut within the first half of 2025. Honeywell stated the breakup will occur a way that’s tax-free to Honeywell shareholders.
The firm is continuous to execute its beforehand introduced spin-off of its Advanced Materials enterprise. It expects to finish this by the tip of 2025 or early in 2026. Honeywell stated the three unbiased firms can be appropriately capitalized with the monetary flexibility to reap the benefits of future development alternatives. It stated it expects Honeywell Automation and Honeywell Aerospace to every preserve a powerful investment-grade credit standing.