Honeywell to Split Into Two Companies Amid Elliott Pressure

CHARLOTTE, N.C. — Honeywell International Inc. is preparing to split into two independent publicly traded companies following pressure from activist investor Elliott Investment Management, according to people familiar with the matter.

The industrial conglomerate, based in Charlotte, North Carolina, plans to separate its operations into two entities: one focused on automation and the other on aerospace and defense. The company could formally announce the breakup alongside its fourth-quarter earnings report, scheduled for early February, the sources said. The final decision will require approval from Honeywell’s board.

Honeywell’s shares have risen more than 11% over the past year, giving the company a market value of approximately $143 billion. However, its performance has lagged behind the S&P 500, which has gained over 20% during the same period.

In December, Honeywell disclosed it was exploring a separation of its aerospace business as part of a broader operational review. The company indicated it would provide further details during its fourth-quarter earnings announcement. Earlier, Bloomberg News reported that Elliott had acquired a $5 billion-plus stake in Honeywell, marking its largest investment in a single stock, and was advocating for a breakup.

Under CEO Vimal Kapur, Honeywell has been actively reshaping its portfolio. In October, the company announced plans to spin off its advanced materials division. Analysts suggest that a larger breakup could unlock significant value. Barclays Plc estimated a sum-of-the-parts valuation of about $270 per share for Honeywell’s assets, based on free cash flow expectations, compared to its Jan. 10 closing price of $218.19. Jefferies Financial Group Inc. analyst Sheila Kahyaoglu noted that the aerospace business alone could be worth more than $90 billion.

Honeywell’s deliberations are ongoing, and the specifics of the separation, including timing, could still change, the sources said. A Honeywell representative referred to the company’s December statement and declined further comment. Elliott also declined to comment.

The move aligns with a broader trend among industrial conglomerates. General Electric Co. recently completed its split into three separate entities, spinning off its health-care business in 2023 and its energy arm in 2024. In 2017, Dan Loeb‘s Third Point LLC also pushed Honeywell to spin off its aerospace division.