Honeywell considers spinning off its aerospace business

Honeywell (HON.O) announced on Monday that it is considering spinning off its high-margin aerospace division, a move supported by activist investor Elliott Investment Management, which has pushed for a company breakup.

Honeywell considers spinning off its aerospace business

Under CEO Vimal Kapur, Honeywell has focused on its automation, aviation, and energy sectors but has seen its stock underperform this year, prompting Elliott’s $5 billion stake. The company said its board has made "significant progress" in reviewing strategic options and will provide an update with its fourth-quarter results. Shares rose 3.2% in pre-market trading. Elliott welcomed the announcement, expressing support for Honeywell's ongoing transformation. Analysts estimate Honeywell's aerospace division, which supplies Boeing and Airbus, could be valued between $90 billion and $120 billion, driven by rising jet production and growing demand for repairs.

Mirroring General Electric's 2021 spinoff

Honeywell’s potential spinoff mirrors General Electric's 2021 move. In addition, the company has made several acquisitions, including Carrier's security business for $4.95 billion and aerospace firm CAES Systems for $1.9 billion. For the first nine months of 2024, Honeywell's aerospace business generated $11.47 billion, about 40% of its total sales.