Dive Brief:
- Honeywell International announced plans on Thursday to streamline its portfolio by spinning off its automation and aerospace businesses into independent public companies.
- Honeywell Automation will focus on the industrial sector and offer technologies, solutions and software to boost customers’ productivity, according to a news release. Honeywell Aerospace will supply commercial and defense aircraft customers with products such as aircraft propulsion, cockpit and navigation systems.
- The split is expected to be complete in the second half of 2026. The news comes months after Honeywell announced it was separating its advanced materials business, which is set to be complete by year’s end or early 2026.
Dive Insight:
Honeywell has been evaluating its offerings since Vimal Kapur took over as CEO in 2023, with the goal of simplifying the industrial giant’s portfolio, Kapur said in a Feb. 6 LinkedIn post.
“We believe the planned separation of automation, aerospace and advanced material will benefit all stakeholders and position all three stand-alone companies for long-term profitable growth,” Kapur said in an earnings call on Thursday. “The part will enable three pure-play companies to pursue simplified go-forward strategies that are clearly aligned to the unique purpose of each business and to address the specific needs of their end markets.”
The company has made strategic moves since 2023 to streamline its portfolio as it shifts focus to automation, aviation technology and clean energy. The industrial giant announced plans to exit the personal protective equipment business in November and sell the PPE portfolio for $1.3 billion to Protective Industrial Products, a deal expected to close later this year.
Honeywell also made several acquisitions over the past year with the goal of driving growth in those three priority areas. The company completed the acquisitions of cloud-based service company Carrier Global Access Solutions, navigation technology company Civitanavi Systems, electronics company CAES and Air Products’ liquefied natural gas business.
In December, Honeywell entered a research and development agreement with aerospace component maker Bombardier, valued at $17 billion. The two companies will work on enhancing jet engines and creating satellite communications technologies for Bombardier’s planes. The deal also resolved an eight-years-long lawsuit brought by Bombardier regarding jet engine prices, The Gazette reported.
Additionally, the manufacturer is making technical and commercial progress on growing its integrated quantum computing subsidiary, Quantinuum, Kapur added. Last month, Japan-based firm Softbank Corp. and Quantinuum announced a partnership to develop quantum computing solutions.
“We will continue to make M&A a consistent part of our operational rhythm seeking to acquire accretive bolt-on that further shape the portfolio and enhance the value proposition of each business during the dependency of the separation process,” Kapur said. “We are confident that our dynamic capital deployment strategy, including acquisitions, further share repurchases and optimizing our operations will lead to an enhanced financial profile for Honeywell that is more attractive to investors.”
