Honeywell (NASDAQ: HON) revealed today that its Board of Directors has finalized its extensive business portfolio review, originally initiated by Chairman and CEO Vimal Kapur last year. The company plans to fully separate its Automation and Aerospace Technologies divisions, a move that, along with the previously announced spin-off of its Advanced Materials division, will result in three publicly listed companies with distinct strategic focuses and growth drivers. The separation is slated for completion in the second half of 2026 and will be executed in a tax-free manner for Honeywell shareholders.
Vimal Kapur, Chairman and CEO, commented, “This strategic shift will establish three independent leaders in their respective industries, each poised for tailored growth and value creation. By simplifying Honeywell’s structure, we are accelerating the potential for operational improvements and aligning our businesses with key market trends such as sustainability, digitalization, and AI.”
The separation will position Honeywell Automation to lead the transition to autonomous systems, while Honeywell Aerospace will focus on the future of aviation. Both businesses will benefit from clearer strategic priorities and the ability to pursue focused growth opportunities. The move will also create a third entity, Advanced Materials, which will operate as a standalone leader in sustainability-focused specialty chemicals and materials.
Honeywell is strategically positioning itself for the future by establishing three distinct industry leaders, each focused on driving innovation and growth. Honeywell Automation, projected to generate $18 billion in revenue in 2024, will play a critical role in the digital transformation of industrial sectors. By integrating process technology, software, and AI-driven solutions, the division aims to enhance productivity and sustainability while leveraging its global scale and expertise to serve high-growth markets.
Honeywell Aerospace, expected to contribute $15 billion in revenue in 2024, will continue to be a dominant force in the aviation sector. As one of the largest aerospace suppliers, it provides a broad portfolio of systems for both commercial and defense applications. The division remains committed to pioneering advancements in flight electrification and autonomous aviation, positioning itself as a leader in next-generation aerospace technologies and long-term industry growth.
The newly established Advanced Materials division will concentrate on cutting-edge innovations in fluorine products, electronic materials, and sustainable packaging solutions. With an estimated $4 billion in revenue for 2024, this standalone business will benefit from a flexible capital allocation strategy, allowing it to capitalize on global sustainability trends. By focusing on advanced material sciences, the division is set to drive new technological breakthroughs and strengthen its market presence in environmentally sustainable solutions.
Honeywell remains committed to its portfolio optimization strategy, with plans to deploy at least $25 billion toward capital expenditures, dividends, share repurchases, and acquisitions through 2025. Recent strategic acquisitions include the Access Solutions business, Civitanavi Systems, CAES Systems, and Air Products’ LNG business. The company also plans to divest its Personal Protective Equipment business by mid-2025.
The planned separation is anticipated to be tax-free for shareholders and is expected to be completed in the second half of 2026, subject to regulatory approvals. Meanwhile, the spin-off of the Advanced Materials division is expected to occur by the end of 2025 or early 2026.
Honeywell Automation and Honeywell Aerospace are both expected to maintain strong investment-grade credit ratings, ensuring they are well-positioned to capitalize on future growth opportunities. Goldman Sachs & Co. LLC and Centerview Partners LLC are serving as financial advisors, while Skadden, Arps, Slate, Meagher & Flom LLP is providing legal counsel to Honeywell.
Honeywell is a globally integrated company serving diverse industries across multiple regions. Our business is driven by three key megatrends—automation, the future of aviation, and energy transition—supported by the Honeywell Accelerator operating system and the Honeywell Connected Enterprise software platform.
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