Honeywell weighs potential separation of aerospace business

Honeywell’s board of directors are weighing up a potential separation of the company’s Aerospace business. 

A business portfolio evaluation launched earlier this year by chairman and CEO Vimal Kapur, aimed at exploring alternatives for unlocking shareholder value.

"Since aligning our business this past January to three compelling megatrends – automation, the future of aviation and energy transition – we have been moving swiftly and decisively to optimise the Honeywell portfolio to deliver superior growth and drive incremental shareholder value. At the same time, we have been evaluating more transformational changes," explained Kapur.

"Following the portfolio enhancements announced earlier this year, Honeywell is now well-positioned for significant transformational alternatives, and we are continuing our deeper, more granular exploration of their feasibility and possible timing," he added.

Since December 2023, Honeywell has aimed to drive growth and simplify its portfolio, following the realignment of its business segments, including approximately $9 billion of accretive acquisitions. 

This announcement comes after activist investor Elliott Investment Management called for a split of Honeywell's aerospace and automation businesses in November, after taking a more than $5 billion stake in the company. 

Elliott Investment Management said it “welcomes” Honeywell's evaluation of divesting its aerospace business. 

“We believe the portfolio transformation Vimal and his team are leading represents the right course for Honeywell, and we look forward to the upcoming completion of the review and to supporting Honeywell as it implements the necessary steps to realise its full value,” Elliott continued in its statement. 

Elliott had previously been at odds with Southwest Airlines after acquiring a nearly $2bn stake in the carrier. The two parties were able to put the feud to rest in late October 2024.

Honeywell plans to provide further updates within its fourth quarter 2024 earnings release.