Honeywell to spin off advanced materials business to drive growth

Honeywell announced plans to spin off its advanced materials business into an independent U.S. public company, which is expected to be completed by the end of 2025 or early 2026. Honeywell expects to execute the plan tax-free to shareholders.

As a leading global supplier of specialty chemicals and materials focused on sustainability, the business will benefit from enhanced strategic focus and financial flexibility to pursue innovation and growth opportunities through investment cycles. In addition, the planned spin-off will enable Honeywell to advance its strategic priorities of accelerating organic growth, evolving its accelerator operating system and optimizing its product portfolio.

"Given the continued global demand for advanced specialty chemicals and materials, we believe now is the right time for this business to grow independently, leveraging its leading technologies and deep customer relationships," said Vimal Kapur, Honeywell Chairman and CEO. "As an industry leader, the new company will have an even sharper focus on innovation, enabling it to create more value for shareholders by developing new, more sustainable solutions and products using next-generation chemistry."

"This is the latest step in Honeywell's portfolio optimization, a key priority I have made since my first year leading the company," added Kapur. "Through strategic add-on acquisitions and divestitures of high-quality but non-core business lines, we continue to enhance our portfolio and further align Honeywell with three compelling megatrends: automation, the future of aviation and the energy transition - underpinned by our accelerator business model."

The planned spin-off of the Advanced Materials business is part of four recent acquisitions Honeywell has announced as part of its disciplined capital deployment strategy. The company is focused on high-return acquisitions that will drive future growth in its portfolio, aligned with three strong trends." In the past 12 months, Honeywell completed the following acquisitions: Carrier Access Solutions, Civitanavi, CAES and Air Products' liquefied natural gas (LNG) business.

Honeywell is on track to exceed its commitment to invest at least $25 billion in high-return capital expenditures, dividends, opportunistic stock purchases and value-added acquisitions through 2025, including approximately $9 billion in acquisitions through 2024.

After the planned spin-off of Advanced Materials is completed, Honeywell will further increase organic sales growth, reduce capital intensity, reduce sales cyclicality and enhance free cash flow generation. Advanced Materials will become a pure-play company focused on sustainable specialty chemicals and materials businesses with leading positions in fluoroproducts, electronic materials, industrial fibers and healthcare packaging solutions.