Charlotte-based Honeywell plans to separate into three publicly listed companies, the industrial conglomerate announced Thursday. It will spin off its Automation and Aerospace Technologies, along with the previously announced plan to spin Advanced Materials.
The separation is intended to be completed in the second half of 2026 and in a manner that is tax-free to Honeywell shareholders. Honeywell employs 97,000 people worldwide, including 1,150 in Charlotte, where it moved its headquarters in 2018.
The Honeywell automation business headquarters will remain in Charlotte, says company spokeswoman Caitlin Leopold. Honeywell’s aerospace headquarters will remain in Phoenix, says Leopold. Honeywell’s aerospace division already has 11 facilities in Arizona and about 7,800 employees, according to the company website.
Honeywell will make a decision about its advanced materials business location in the next few weeks, Leopold says.
Breaking up the company into three parts will make each of them more focused and agile, Honeywell CEO Vimal Kapur said during an earnings call with investors after the announcement.
“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,” says Kapur.
Thursday’s public announcement arrived about one month after Elliott Investment Management revealed a stake of more than $5 billion in the aerospace, automation and materials company. Elliott had been pushing for Honeywell to separate its automation and aerospace businesses, according to reports.
Shares of Honeywell declined 4% in early Thursday trading after the company offered a tepid forecast for profit and revenue growth this year. Shares have gained 10% over the past year and 21% over the past five years, underperforming the S&P 500 Index by a large margin.
Adamczyk had been CEO between 2017 and June 2023, and led the decision to move the company headquarters to Charlotte from New Jersey. He left the board last June.
Honeywell’s board and its CEO had been exploring strategic options for the company for several months.
The CEO told an analysts’ conference in September that he’s been disappointed by Honeywell’s stock performance and the speed of change at the company over the past year. Since succeeding Darius Adamcyzk as CEO in June 2023, he’s realigned Honeywell’s business segments with a focus on the three megatrends: automation, the future of aviation and energy transition.
“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,” Kapur says in a release Thursday.
Honeywell says the planned separations will create value for stakeholders as each will benefit from:
- Simplified strategic focus;
- Greater financial flexibility to pursue growth opportunities throughout investment cycles;
- Improved ability to tailor capital allocation priorities;
- Focused boards of directors and management teams with deep domain expertise;
- Distinct investment profiles that position each company to unlock long-term value for shareholders.
The company outlined plans for each:
Honeywell Automation will focus on the “industrial world’s transition from automation to autonomy.” It had 2024 revenue of $18 billion.
Honeywell Aerospace technology is used on “virtually every commercial and defense aircraft platform worldwide and include aircraft propulsion, cockpit and navigation systems, and auxiliary power systems.” It had $15 billion in annual revenue in 2024. Honeywell Aerospace will be one of the largest publicly traded, pure play aerospace suppliers, with “leading positions in technology and systems,” including increasing electrification and autonomy.
Advanced Materials will be a specialty chemicals and materials pure play with leading positions across fluorine products, electronic materials, industrial grade fibers, and healthcare packaging solutions. It had nearly $4 billion in revenue last year. Its spin off is expected to be completed by the end of 2025 or early 2026.
Goldman Sachs was lead financial adviser to Honeywell in its strategic portfolio review. Centerview Partners also provided financial advice to Honeywell. Skadden, Arps, Slate, Meagher & Flom was the external legal counsel.
NOTE: An earlier version of this story says Honeywell will move its aerospace business headquarters to Phoenix. Aerospace is already in Phoenix.