Why Honeywell has Split into Three Independent Companies
Honeywell has make the decision to separate its Automation, Aerospace and Advanced Materials divisions into three distinct publicly traded companies.
This decision follows an extensive business portfolio evaluation led by Chairman and CEO Vimal Kapur, aiming to drive innovation, operational efficiency and long-term value for shareholders.
It also follows in the footsteps of companies like General Electric and Alcoa.
The separation is expected to be completed in the second half of 2026 and will be structured as a tax-free transaction for Honeywell shareholders.
The newly independent companies will each have a sharper strategic focus, enhanced financial flexibility and the ability to allocate capital more effectively to drive organic growth.
By operating as standalone entities, these businesses will benefit from dedicated leadership teams, tailored investment strategies and increased agility in responding to market dynamics.
They will also better positioned to address the technological innovation and unique needs of specific manufacturing sectors.
"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 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."
Forming three specialised industry leaders
The separation will establish three new publicly traded companies, each a leader in its respective field:
Honeywell Automation
This division will spearhead the transition from automation to autonomy, providing cutting-edge industrial technologies, software and solutions that enhance productivity.
With 2024 revenue of US$18bn, Honeywell Automation will leverage its strong global presence and decades of expertise to serve high-growth industries and drive digital transformation.
Honeywell Aerospace
With a 2024 revenue of US$15bn, Honeywell Aerospace will become one of the largest publicly traded aerospace technology providers.
The company’s solutions—spanning aircraft propulsion, avionics, cockpit systems and auxiliary power units—are integrated into nearly every commercial and defence aircraft worldwide.
As an independent entity it will focus on advancing flight electrification and autonomy.
Advanced Materials
This business unit, generating approximately US$4bn in revenue, will become a specialised chemicals and materials company with a strong emphasis on sustainability.
The division already holds market-leading positions in fluorine products, electronic materials, industrial-grade fibres and healthcare packaging.
With its innovative Solstice hydrofluoro-olefin (HFO) technology, the company will continue to grow green manufacturing solutions.
"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," adds Elliott Partner, Marc Steinberg and Managing Partner Jesse Cohn.
"The enhanced focus, alignment and strategic agility enabled by this separation will allow Honeywell to realise 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."
Each new company will benefit from a dedicated board and management team with deep domain expertise, ensuring a focused approach to strategic execution and value creation.
Why is Honeywell making this move?
Honeywell’s decision to pursue this separation stems from its commitment to enhancing shareholder value, simplifying its business model and unlocking growth potential across diverse sectors.
The company understands that aerospace, aviation and the chemicals industry are undergoing profound transformation and consolidated effort is needed to meet these industries evolving technological needs.
- Sharpened strategic focus: Each business will have greater clarity on its core mission, allowing for more effective decision-making and resource allocation
- Enhanced financial flexibility: Independent financial structures will enable the companies to pursue growth opportunities without competing for capital within a larger conglomerate
- Optimised capital allocation: With distinct investment profiles, each company can align its capital allocation strategy with its unique growth trajectory and market conditions
- Improved agility and innovation: Separate leadership teams will be able to respond swiftly to technological advancements and shifting industry demands
- Greater value for shareholders: By separating the businesses, Honeywell expects to unlock long-term value, creating investment opportunities tailored to different risk and growth appetites
In addition to this separation Honeywell has actively streamlined its portfolio.
Over the past few years the company has made approximately US$9bn in strategic acquisitions, including acquiring the Access Solutions business from Carrier Global and the liquefied natural gas (LNG) business from Air Products.
Honeywell has also divested non-core operations, such as its Personal Protective Equipment business, which is set to close in the first half of 2025.
The restructuring represents a bold step in Honeywell’s evolution, reinforcing its position as a global leader in industrial automation, aerospace technology and advanced materials.
By fostering innovation and efficiency within each new entity, the company is poised to drive long-term growth and strengthen its impact across multiple industries.
"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," Vimal adds.
"As a standalone company with a simplified operating structure and enhanced focus, Honeywell Automation will be better able to capitalise on the global megatrends underpinning its business, from energy security and sustainability to digitalisation and artificial intelligence."
"As aerospace prepares for unprecedented demand in the years ahead across both commercial and defence markets, now is the right time for the business to begin its own journey as a standalone, public company."
"Today's announcement is the culmination of more than a century of innovation and investment in leading technologies from Honeywell Aerospace that have revolutionised the aviation industry several times over.
"This next step will further enable the business to continue to lead the future of aviation."
Explore the latest edition of Manufacturing Digital and be part of the conversation at our global conference series, Manufacturing LIVE.
Sign up to our weekly newsletter here.
Discover all our upcoming events and secure your tickets today.
Manufacturing Digital is a BizClik brand.
