Honeywell to split in three after pressure from activist investor Elliott Management

• The industrial and aerospace giant Honeywell said Thursday that it would divide into three listed companies independently.
• Honeywell said that he will separate his aerospace and automation activities into distinct entities, alongside his previously announced spin-off of the advanced materials unit.
• Honeywell said he intended to finish separation in the second half of 2026, which would be free from tax for its shareholders.

Honeywell said Thursday that it would divide into three listed companies independently, breaking one of the last US standing American conglomerates only a few months after the activist investor Elliott Management took a $ 5 billion stake in the industrial giant.

Honeywell’s shares, however, fell by almost 2.5% in the market prior to the market, reversing the course of the first gains after the company has planned sales and slowdown profits for 2025.

The company said that it will separate its aerospace and automation activities into separate entities, alongside its derivative previously announced from the advanced material unit.

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With Honeywell’s decision, the ranks of the main industrial conglomerates in the country have further decreased, following similar choices in recent years by 3M, General Electric and United Technologies to divide the main divisions.

The industrial and aerospace giant was on a transaction key under the CEO Vimal Kapur, the loss of assets that are not focused on the aviation, automation and energy sectors.

Despite several smaller shots, Elliott, whose participation in Honeywell is his greatest investment, argued that the company had to separate.

Honeywell drew the attention of Elliott because his share price underperform the market. Its shares had increased by 7.7% in 2024 until November 11, one day before Elliott disclosed its position, while the wider market had gained 26.6% during the same period.

Analysts had previously estimated that Honeywell’s high -margin aerospace activities could be worth between $ 90 and $ 120 billion, including debt.

The air transport industry, faced with a shortage of new jets, had to use older and high maintenance intensity planes during a travel boom, bringing up sales for players such as Honeywell who provide services and services and spare parts.

The aerospace unit is the largest revenue generator in Honeywell, representing around 40% of the company’s total income in 2024, and Tables Boeing and Airbus among its customers. He also has contracts with the American government, providing communication and navigation systems, among other services.

Honeywell said that he will separate his aerospace, automation and materials advanced in three distinct entities. (Reuters / Denis Balibouse / Photo / Reuters file)

Honeywell had announced his intention to run his advanced material unit in a listed company in October. He said in December that he was considering a spin-off of his aerospace company, after Elliott’s push.

The company said that it intended to finish separation in the second half of 2026, which would be free from tax for its shareholders.

Elliott’s push is not the first time that Honeywell has faced the pressure from activists to break the business. In 2017, he managed to raise his shoulders on the third point of Daniel Loeb, who urged the company to turn its aerospace division.

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The industrial giant has expressed its portfolio through a series of divests and acquisitions, but such a important break would be a first for the company more than 100 years old.

It provides separately a profit adjusted per share between $ 10.10 and $ 10.50 for 2025, not exceeding the average analysts of $ 10.93 according to data compiled by LSEG.

Its sales expectations between $ 39.6 billion and $ 40.6 billion for the year also dropped Wall Street expectations of $ 41.22 billion.