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Honeywell International is to split into three independent businesses, breaking up one of the US’s last big industrial conglomerates just months after activist investor Elliott Management took a stake.
The company, which has a market valuation of $145bn, said on Thursday it would spin off its aerospace division from its automation business and progress plans to separate its advanced-materials division.
The separation, it said, would result in three publicly listed “industry leaders with distinct strategies and growth drivers”.
Honeywell shares were up 5 per cent in pre-market trading in New York.
The break-up announcement comes after pressure last year from Elliott, which had called on Honeywell to end its conglomerate structure and split itself into two.
The activist investor had taken a $5bn stake in Honeywell in November last year, arguing it should follow the examples of General Electric, 3M and Johnson Controls. Honeywell had been one of the last remaining holdouts among a group of industrial conglomerates, several of which have already broken up.
Honeywell, led by chief executive Vimal Kapur, subsequently announced in December that it was exploring a spin-off of its aerospace business, adding that it was also “evaluating more transformational changes”.
Kapur said on Thursday that breaking Honeywell into three separate companies would “unlock significant value for shareholders and customers”.
The company’s aerospace business, which counts Boeing and Airbus among its customers, makes up 40 per cent of the group’s annual revenues but has traded at a discount to pure aerospace competitors such as TransDigm.
