Honeywell Continues Comprehensive Business Portfolio Evaluation

On December 16, 2023, Honeywell announced that its board will continue the comprehensive business portfolio evaluation initiated by Chairman and CEO Vimal Kapur earlier this year. This evaluation aims to explore strategic options for further unlocking shareholder value, including the possibility of divesting its Aerospace business unit.

Honeywell’s Aerospace business unit, primarily responsible for producing engines and cockpit systems for major airlines like Boeing, is a major source of the company’s revenue. In the first nine months of this year, this business unit generated $11.47 billion (approximately ¥83.5 billion), accounting for about 40% of the company’s total sales during the same period.

The board has made significant progress in the evaluation process and plans to provide updates in the fourth quarter earnings report for 2024. According to Reuters, this strategic move has received support from activist investor Elliott Investment Management, which has been advocating for Honeywell to pursue business separation.

Vimal Kapur stated, “Since aligning our business with three major trends (automation, the future of aviation, and energy transition) in January of this year, we have been rapidly and decisively optimizing Honeywell’s product portfolio to achieve superior growth and drive shareholder value. At the same time, we are evaluating more transformative changes.”
Kapur added, “Following the announcement of enhancing the portfolio earlier this year, Honeywell is now ready to embrace significant transformational plans, and we will continue to explore their feasibility and possible timing in greater depth.”

Focusing on Core Business

Since December 2023, Honeywell has announced a series of strategic initiatives to drive organic growth and simplify its product portfolio after the business restructuring. The company has completed acquisitions of Carrier’s Security Business, Civitanavi Systems, CAES Systems, and Air Products’ LNG business for a total of approximately $9 billion to strengthen its position in industrial automation and aerospace.

On November 22, 2023, Honeywell announced plans to sell its Personal Protective Equipment (PPE) business to PIP for $1.33 billion (approximately ¥9.6 billion), with the transaction expected to close in the first half of next year.

Previously, on October 9, 2023, Honeywell announced plans to spin off its High-Performance Materials business into an independent publicly traded company in the U.S., with the split expected to occur by the end of 2025 or early 2026.