Honeywell – Honeywell Announces Intent to Separate Automation and Aerospace, Enabling the Creation of Three Industry-Leading Companies
- Honeywell Automation will be a pure play automation leader with global scale and a vast installed base
- Honeywell Aerospace will be a premier technology and systems provider enabling the future of aviation globally
- Advanced Materials, previously announced to be spun, will be a leading provider of sustainability-focused specialty chemicals and materials
- Separation of Automation and Aerospace to be completed in a manner that is tax-free to Honeywell shareholders in the second half of 2026
CHARLOTTE, N.C., /PRNewswire/ — Honeywell (NASDAQ: HON) announced today that its Board of Directors completed the 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 industry leaders 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,” 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. 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.”
“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 added. “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.”
“As Aerospace prepares for unprecedented demand in the years ahead across both commercial and defense markets, now is the right time for the business to begin its own journey as a standalone, public company,” Kapur continued. “Today’s announcement is the culmination of more than a century of innovation and investment in leading technologies from Honeywell Aerospace that have revolutionized the aviation industry several times over. This next step will further enable the business to continue to lead the future of aviation.”
“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,” said 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.”
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.
Creating Three Industry-Leading Focused Companies
Honeywell Automation: Following the completion of the announced transactions, Honeywell will be the 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. 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.
Honeywell Aerospace: Honeywell Aerospace technology and solutions are used on virtually every commercial and defense aircraft platform worldwide and 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, with leading positions in technology and systems that will continue to deliver the future of aviation through increasing electrification and autonomy of flight.
Advanced Materials: The Advanced Materials business will be a sustainability-focused specialty chemicals and materials pure play with leading positions across fluorine products, electronic materials, industrial grade fibers, and healthcare packaging solutions. With nearly $4 billion in revenue last year, Advanced Materials offers leading technologies with premier brands, including the breakthrough low global warming Solstice® hydrofluoro-olefin (HFO) technology. As a standalone company with a large-scale domestic manufacturing base, it will be positioned to benefit from a compelling investment profile and a more flexible and optimized capital allocation strategy.
Honeywell’s Continued Simplification and Portfolio Optimization
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.
Since December 2023, Honeywell has announced a number of 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 Systems, and 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.
Transaction Details
The planned separation of Automation and Aerospace is expected to be achieved in a manner that is tax-free to Honeywell shareholders and targeted for completion in the second half of 2026, subject to certain customary conditions, including, among others, the filing and effectiveness of applicable filings (including a Form 10 registration statement) with the U.S. Securities and Exchange Commission, receipt of customary confirmation that the separation is expected to be tax-free to Honeywell’s shareholders, and receipt of applicable regulatory and other customary approvals and final approval by Honeywell’s board of directors.
The company is continuing to execute on its previously announced spin-off of its Advanced Materials business, which is expected to be completed by the end of 2025 or early in 2026. The three independent companies will be appropriately capitalized with the financial flexibility to take advantage of future growth opportunities. Honeywell Automation and Honeywell Aerospace are each expected to maintain a strong investment grade credit rating.
Goldman Sachs & Co. LLC served as lead financial advisor to Honeywell in its strategic portfolio review. Centerview Partners LLC also provided financial advice to Honeywell. Skadden, Arps, Slate, Meagher & Flom LLP provided external legal counsel.
Conference Call Details
Honeywell will discuss the transaction, in addition to its fourth quarter results and 2025 outlook, during an investor conference call starting at 8:30 a.m. Eastern Time today. A live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company’s website (www.honeywell.com/investor). A replay of the webcast will be available for 30 days following the presentation.
SourceHoneywell
EMR Analysis
More information on Honeywell: See the full profile on EMR Executive Services
More information on Vimal Kapur (Chairman and Chief Executive Officer, Honeywell): See the full profile on EMR Executive Services
More information on Michal Stepniak (Senior Vice President and Chief Financial Officer, Honeywell): See the full profile on EMR Executive Services
More information on Honeywell Industrial Automation Segment (IA) by Honeywell: https://automation.honeywell.com/us/en + With a deep history in industrial automation that spans more than five decades, Honeywell enables process industry operations, creates world-class sensor technologies, automates supply chains, makes warehouses smarter, and improves worker safety. This combination build on our core strengths in controls and automation technologies, deliver better commercial outcomes for our customers, and enhance our growth.
More information on Lucian Boldea (President and Chief Executive Officer, Industrial Automation Segment (IA), Honeywell): See the full profile on EMR Executive Services
More information on Honeywell Building Automation Segment (BA) by Honeywell: https://buildings.honeywell.com/us/en + Through hardware, software, sensors, and analytics, Honeywell helps customers convert buildings into integrated, safe, and more sustainable assets. With solutions and services used in more than 10 million buildings worldwide, Building Automation will continue to strengthen Honeywell’s position in attractive end markets like hospitals, airports, education, and data centers.
More information on Billal Hammoud (President and Chief Executive Officer, Building Automation Segment (BA), Honeywell): See the full profile on EMR Executive Services
More information on Honeywell Aerospace Technologies Segment (AT) by Honeywell: https://aerospace.honeywell.com/ + Products and services from Honeywell Aerospace Technologies are found on virtually every commercial, defense and space aircraft. The Aerospace Technologies business unit builds aircraft engines, cockpit and cabin electronics, wireless connectivity systems, mechanical components and more. Its hardware and software solutions create more fuel-efficient aircraft, more direct and on-time flights and safer skies and airports.
More information on Jim Currier (President and Chief Executive Officer, Aerospace Technologies Segment (AT), Honeywell): See the full profile on EMR Executive Services
More information on Honeywell Energy and Sustainability Solutions Segment (ESS) by Honeywell: https://ess.honeywell.com/us/en + With a decades-long focus on sustainability, Honeywell enables the energy evolution, improves resiliency and efficiency, reduces emissions, and facilitates the circular economy. Honeywell’s expertise in this area will continue helping solve the world’s toughest challenges across our end markets.
More information on Ken West (President and Chief Executive Officer, Energy and Sustainability Solutions Segment (ESS), Honeywell): See the full profile on EMR Executive Services
More information on Honeywell Advanced Materials by Honeywell: https://advancedmaterials.honeywell.com/us/en + Honeywell Advanced Materials plays a crucial role in advancing industries worldwide through diverse applications, revolutionary inventions, and pioneering technologies. Our science and technology experts create solutions that help solve our customers’ needs today and in the future. Our solutions span across industries, including Retail, Pharma, Buildings, Manufacturing and Hi-tech. In each of these verticals we bring deep materials and engineering knowledge, which leads to our customers achieving reduction in energy consumption, cutting down their carbon emissions and improving their operational efficiencies.
More information on Jeff Dormo (President, Honeywell Advanced Materials, Honeywell): See the full profile on EMR Executive Services
More information on Solstice® by Honeywell Advanced Materials by Honeywell: https://advancedmaterials.honeywell.com/us/en/brands/solstice-refrigerants-foam-and-propellants + Honeywell’s breakthrough Solstice® hydrofluoroolefin (HFO) technology, which helps customers lower their carbon footprint and improve energy efficiency without sacrificing end-product performance, is used in various applications, including refrigerants for supermarkets, air conditioning for cars and trucks, blowing agents for insulation, propellants for personal and household care and solvents for cleaning solutions. Honeywell has already invested a billion dollars in research, development, and new capacity for the technology, having anticipated the need for lower-GWP solutions to combat climate change more than a decade ago.
More information on Global Access Solutions – LenelS2 by Honeywell Building Automation Segment (BA) by Honeywell: https://www.lenels2.com/en/ + Leader in commercial and enterprise access solutions. LenelS2 is the global leader in advanced physical security solutions, including access control, video surveillance and mobile credentialing. We innovate products, systems and services to address the most complex, evolving needs of some of the world’s most demanding organizations. Whether you’re operating a small- to medium-sized business or the largest global enterprise, our solutions are built to solve your unique challenges.
More information on Global Access Solutions – Onity by Honeywell Building Automation Segment (BA) by Honeywell: https://www.onity.com/en/us/ + Electronic locks, specifically hospitality access and mobile credentials. For over 80 years, we have understood the opportunity and potential that doors hold. As a worldwide leader in the access control industry, we have continually expanded our services and solutions to become a leading provider of innovative facility technologies, including mobile access technology, electronic locking systems, and electronic in-room safes.
More information on Global Access Solutions – Supra by Honeywell Building Automation Segment (BA) by Honeywell: https://www.suprasystems.com/ + Cloud-based electronic lockboxes and scheduling software. Supra has brought efficiency and peace of mind to the real estate industry since 1955 – providing a range of leading access solutions. Today, Supra offers easy-to-use lockboxes, digital key solutions and a showing management platform that allows agents to focus on their clients.
More information on Civitanavi Systems S.p.A. by Honeywell: https://www.civitanavi.com/ + Civitanavi Systems is one of the main players in the sector of high-tech inertial navigation and stabilization systems.
Thanks to a vertically integrated business model and a constant desire for technological innovation, Civitanavi excels in the design, development and production of high precision inertial navigation and stabilization systems.
The application of proprietary methods and technologies, based on FOG (Fiber Optic Gyroscope) and MEMS (Micro Electro-Mechanical Systems) technology, enables the company to best meet the specific needs of its customers, depending on the sector in question: Aerospace, Defence and Industrial.
Founded as a start-up in 2012 in Italy, Civitanavi was recognised as an innovative SME in 2017 and today is presented as a benchmark in the global competitive scenario.
The company operates from its registered office in Pedaso (on the Adriatic coast of the Marche region) and other four sites in Ardea (Rome) Casoria (Naples) and Turin with a staff of about 160 employees working throughout Italy.
More information on Andrea Pizzarulli (General Manager, Civitanavi Systems S.p.A., Honeywell): See the full profile on EMR Executive Services
More information on CAES Systems Holdings LLC by Honeywell Aerospace Technologies Segment (AT) by Honeywell: https://caes.com/ + CAES pioneers advanced electronics that underpin many of the world’s most critical missions. We design, engineer, test, and manufacture advanced electronic solutions for the U.S. aerospace and defense industry. From inception and development engineering, to full-rate production and sustainment, we work closely with customers as partners throughout the program lifecycle.
We partner with customers, co-investing in technology development and program assets to enable them to win their most strategically important programs.
Headquartered in Arlington, Virginia, with locations across the country, CAES is comprised of talented individuals who like to solve complex problems. Our employees are mission-driven and proud of the world-class products they manufacture. As a people-focused organization, we empower our employees to drive excellence in all that we do.
Headquartered in Arlington, Va., CAES (formerly known as Cobham Advanced Electronic Solutions) has 13 facilities in North America, including highly automated manufacturing facilities with fully automated test and tuning processes. The acquisition will add approximately 2,200 employees and a deep bench of RF engineering talent.
More information on Mike Kahn (President and Chief Executive Officer, CAES, Honeywell): See the full profile on EMR Executive Services
More information on Air Products by Honeywell Energy and Sustainability Solutions Segment (ESS) by Honeywell: https://ess.honeywell.com/us/en + Currently, Honeywell provides a pre-treatment solution serving LNG customers globally. Air Products’ complementary LNG process technology and equipment business consists of a comprehensive portfolio, including in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment. CWHEs provide the highest throughput of natural gas in a single exchanger with a small footprint and robust, reliable and safe operations both onshore and offshore.
More information on Honeywell Personal Protective Equipment Business (part of the Sensing and Safety Technologies Business Unit within the Industrial Automation (IA) by Honeywell): https://ppe.honeywell.com/us/en/home + Honeywell is the worldwide leader in safety, comfort and security. We have united the most respected offerings in the safety industry to deliver an unparalleled, best-in-class retail line of personal protective equipment focused on quality and performance. Our ongoing commitment to innovation, combined with our worldwide engineering and R&D resources, have positioned us to be your premier source for the most complete solutions available. Our singular focus is to be your best safety partner, today and in the future.
The PPE business has approximately 5,000 employees and a streamlined global manufacturing and distribution footprint. It currently operates 20 manufacturing sites and 17 distribution sites across the U.S., Mexico, Europe, North Africa, Asia Pacific and China.
More information on Mike Garceau (President, Honeywell Personal Protective Equipment Business, Sensing and Safety Technologies Business Unit, Honeywell Industrial Automation Segment (IA), Honeywell) See the full profile on EMR Executive Services
More information on Elliott Investment Management L.P.: https://www.elliottmgmt.com/ + Elliott Investment Management L.P. (together with its affiliates, “Elliott”) is one of the oldest investment managers of its kind under continuous management.
As of June 30, 2024, Elliott manages approximately $69.7 billion in assets. The firm employs a staff of 570 people, including nearly half dedicated to portfolio management and analysis, trading and research, in its Florida headquarters and affiliated offices elsewhere.
More information on Paul Singer (Founder, President, Co-Chief Executive Officer and Co-Chief Investment Officer, Elliott Investment Management L.P.): https://www.elliottmgmt.com/who-we-are/
More information on Jesse Cohn (Managing Partner, Elliott Investment Management L.P.): https://www.elliottmgmt.com/who-we-are/ + https://www.linkedin.com/in/jesse-cohn-52300950/
More information on Marc Steinberg (Partner, Elliott Investment Management L.P.): https://www.linkedin.com/in/marcsteinberg1/
More information on SEC (U.S. Securities and Exchange Commission) Regulations: https://www.sec.gov/ + The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public’s trust. The SEC’s regulation of the securities markets facilitates capital formation, which helps entrepreneurs start businesses and companies grow.
EMR Additional Notes:
- Tax-free Spinoff:
- A tax-free spinoff is when a corporation carves out and separates part of its business as a new standalone entity, but the separation does not subject the parent firm to paying taxes.
- The first method of conducting a tax-free spinoff is for the parent company to distribute shares in the new spinoff to existing shareholders in direct proportion to their equity interest in the parent.
- The second method is for the parent company to offer existing shareholders the option to exchange their shares in the parent company for an equal proportion of shares in the spinoff company.
- Hydrofluoroolefin (HFO):
- Hydrofluoroolefins (HFOs) are unsaturated organic compounds composed of hydrogen, fluorine and carbon. These organofluorine compounds are of interest as refrigerants. Unlike traditional hydrofluorocarbons (HFCs) and chlorofluorocarbons (CFCs), which are saturated, HFOs are olefins, otherwise known as alkenes.
- As a refrigerant, you can find HFOs in heat pumps, air conditioning system and commercial cooling installations. As the role of Hydrofluorocarbons (HFCs) is phased-down, HFOs can help ensure systems maintain their safety and energy efficiency while still being an economical alternative.