Honeywell Plans Breakup Under Pressure From Elliott
(Bloomberg) — Honeywell International Inc. is poised to collapse after pressure from activist Elliott Investment Management to break up, people familiar with the matter said.
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The Charlotte, North Carolina-based industrial conglomerate plans to split into two independent publicly traded companies, one focused on automation and the other in aerospace and defense, according to the people.
Honeywell may formally announce the plans with its fourth-quarter earnings, which are expected to be released in early February, the people said, asking not to be identified while discussing confidential information. They said the final details must be signed off by the company’s board.
Shares of Honeywell rose as much as 5% at 2:26 p.m. in New York, giving the company a market value of about $143 billion Up 11% over the past 12 months, trailing the S&P 500’s 22% gain over that period.
In December, Honeywell said it was exploring spinning off its aerospace business as part of a broader review of its operations. At the time, it said it would update its fourth-quarter earnings by $5 billion, according to Bloomberg News has built a position in Honeywell, the largest ever in a single stock, and is forcing the company to pursue a breakup.
Under its chief executive Vimal Kapoor, Honeywell was already taking steps to transform its portfolio and streamline its assets.In October, the company announced its advanced materials division.
Analysts say a larger split could generate significant upside.In a report last month, analysts at Barclays Plc estimated a sum of about $270 a share for Honeywell’s assets, well above expectations for free cash flow The company’s closing price of $218.19 on January 10. In a separate note, Jefferies Financial Group Inc. analyst Sheila Kahyaoglu said the aerospace business alone could be worth more than $90 billion.
Honeywell’s discussions are ongoing and the details and timing of the split could still change, the people said.
A number of large industrial conglomerates have pursued high-profile breakups in recent years. General Electric Co. spun off its health care business in 2023. Dan Loeb’s Third Point LLC in 2017 spun off its energy business ” shares and called on the company to spin off its aerospace division.
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