As per sources, the Honeywell is mulling the creation of at least two new public limited companies as a result of the spin-off, one of which could include its aerospace business. GE is also in the process of spinning-off or divesting its non-core assets.
As per sources familiar with the matter at hand, in efforts aimed at streamlining its business, Honeywell International Inc is planning on by spinning off its non-core assets and in the process create at least two new publicly listed companies.
The move comes in the wake of Darius Adamczyk succeeding David Cote as the CEO of the Morris Plains, New Jersey-based company in April. Furthermore, in September, Honeywell had also stated it would raise its annual dividend by 12%.
As per sources, Honeywell will go ahead with this plan despite protests by Third Point LLC, an activist hedge fund which is a shareholder in the company.
Honeywell plans to spin off its aerospace division and carve out assets worth several billions of dollars.
Sources further reveal, the company is also considering carving out its turbochargers business, which produces components that improve the performance and efficiency of cars and trucks, into one of the newly created companies.
Incidentally, Honeywell categorizes its turbochargers business as part of its aerospace division.
The spin off plan is expected to be ironed out, as early as this week, although its announcement could see some delay, said sources.
Honeywell, which has a market capitalization of $109 billion, declined to comment.
The conglomerates businesses include, electronic and advanced materials, energy efficient products and solutions for homes, sensing, safety and security technologies for buildings, homes and industries and specialty chemicals.
Its shareholder, Third Point is opposing its move since it feels the company is undervalued in comparison to its peers in industrial automation, along with the fact that spinning-off the entire aerospace business would create only $20 billion in shareholder value.
As part of its aerospace business, Honeywell makes aircraft engines and auxiliary power units for General Dynamics Corp, Bombardier Inc, and Textron Inc.
In 2016, Honeywell was pursued by United Technologies Corp, a peer, for a potential merger which it rebuffed.