HONEYWELL EXPLORES STRATEGIC ALTERNATIVES FOR UNLOCKING SHAREHOLDER VALUE; CONTINUES REVIEW OF TRANSFORMATIONAL PORTFOLIO ACTIONS

Rhea-AI Summary

Honeywell (NASDAQ: HON) announced its Board of Directors is continuing a comprehensive portfolio evaluation to explore strategic alternatives for enhancing shareholder value, including a potential separation of its Aerospace business. The company plans to provide an update with its Q4 2024 earnings release.

Since December 2023, Honeywell has executed several strategic moves, including approximately $9 billion in acquisitions such as Carrier's Access Solutions business, Civitanavi Systems, CAES Systems, and Air Products' LNG business. The company also announced plans to spin off its Advanced Materials business and divest its Personal Protective Equipment business.

These actions follow Honeywell's January alignment to three megatrends: Automation, Future of Aviation, and Energy Transition.

Positive

• Strategic acquisitions worth $9 billion to enhance growth
• Portfolio optimization through planned spin-off of Advanced Materials business
• Strategic divestment of Personal Protective Equipment business
• Potential value creation through possible Aerospace business separation

Negative

• None.

Insights

Financial Analyst

Honeywell's strategic portfolio review signals a potentially major transformation, with the highlight being the possible separation of its Aerospace division - a significant revenue generator. The company has already demonstrated its commitment to portfolio optimization through $9 billion in acquisitions across various sectors. The potential Aerospace spin-off could unlock substantial value, as aerospace units typically command premium valuations in the market. Recent acquisitions in growth areas like LNG and Access Solutions, combined with the planned Advanced Materials spin-off, show a clear strategy to streamline operations and focus on core growth drivers. The three-pillar strategy focusing on Automation, Aviation and Energy Transition positions HON well in high-growth markets. This comprehensive portfolio restructuring could lead to improved operational efficiency and enhanced shareholder returns.

Market Research Analyst

The strategic review represents a pivotal moment for Honeywell's market positioning. The company's deliberate focus on three megatrends aligns perfectly with current market dynamics and future growth opportunities. The $9 billion in recent acquisitions demonstrates aggressive portfolio enhancement, particularly in high-growth sectors. The potential Aerospace separation could be a game-changer, as standalone aerospace companies often achieve higher market multiples. The timing of these moves is strategic, capitalizing on strong demand in automation and energy transition sectors. By divesting non-core assets like Personal Protective Equipment and exploring the Aerospace separation, HON is positioning itself as a more focused, higher-growth enterprise that could command a premium valuation.

CHARLOTTE, N.C., Dec. 16, 2024 /PRNewswire/ -- Honeywell (NASDAQ: HON) announced today that its Board of Directors continues the comprehensive business portfolio evaluation launched earlier this year by Chairman and CEO Vimal Kapur to explore additional strategic alternatives for unlocking shareholder value, including the potential separation of its Aerospace business. The Board has made significant progress to date, and Honeywell plans to provide an update with its fourth quarter 2024 earnings release.

"Since aligning our business this past January to three compelling megatrends – Automation, the Future of Aviation and Energy Transition – we have been moving swiftly and decisively to optimize the Honeywell portfolio to deliver superior growth and drive incremental shareholder value. At the same time, we have been evaluating more transformational changes," said Kapur.

"Following the portfolio enhancements announced earlier this year, Honeywell is now well-positioned for significant transformational alternatives, and we are continuing our deeper, more granular exploration of their feasibility and possible timing," Kapur added. "Honeywell's Board of Directors remains committed to maximizing shareholder value creation, and any decision will be evaluated against that goal."

Since December 2023, Honeywell has announced a number of strategic actions to drive organic growth and simplify its portfolio following the realignment of its business segments. This includes approximately $9 billion of accretive acquisitions: the Access Solutions business from Carrier Global, Civitanavi Systems, CAES Systems, and the liquefied natural gas (LNG) business from Air Products. In addition, the company announced a plan to spin off its Advanced Materials business into an independent, U.S. publicly traded company, and entered into an agreement to divest the company's Personal Protective Equipment business.

About Honeywell 
Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends – automation, the future of aviation and energy transition – underpinned by our Honeywell Accelerator operating system and Honeywell Forge IoT platform. As a trusted partner, we help organizations solve the world's toughest, most complex challenges, providing actionable solutions and innovations through our Aerospace Technologies, Industrial Automation, Building Automation and Energy and Sustainability Solutions business segments that help make the world smarter, safer, as well as more secure and sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom. 

We describe many of the trends and other factors that drive our business and future results in this release. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes, or anticipates will or may occur in the future. They are based on management's assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments, and other relevant factors, many of which are difficult to predict and outside of our control. They are not guarantees of future performance, and actual results, developments and business decisions may differ significantly from those envisaged by our forward-looking statements. We do not undertake to update or revise any of our forward-looking statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties, including ongoing macroeconomic and geopolitical risks, such as lower GDP growth or recession, capital markets volatility, inflation, and certain regional conflicts, that can affect our performance in both the near- and long-term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this release can or will be achieved. These forward-looking statements should be considered in light of the information included in this release, our Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.

Contacts:
Media	Investor Relations
Stacey Jones	Sean Meakim
(980) 378-6258	(704) 627-6200
Stacey.Jones@honeywell.com	Sean.Meakim@honeywell.com

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SOURCE Honeywell

FAQ

What strategic alternatives is Honeywell (HON) exploring in 2024?

Honeywell is exploring strategic alternatives including the potential separation of its Aerospace business, with an update expected in Q4 2024 earnings release.

How much has Honeywell (HON) spent on acquisitions since December 2023?

Honeywell has spent approximately $9 billion on acquisitions, including Carrier's Access Solutions business, Civitanavi Systems, CAES Systems, and Air Products' LNG business.

Which businesses is Honeywell (HON) planning to separate or divest?

Honeywell is planning to spin off its Advanced Materials business into an independent public company and divest its Personal Protective Equipment business.

What are the three megatrends Honeywell (HON) aligned its business to in 2024?

In January 2024, Honeywell aligned its business to three megatrends: Automation, the Future of Aviation, and Energy Transition.

When will Honeywell (HON) provide an update on its strategic portfolio review?

Honeywell plans to provide an update on its strategic portfolio review with its fourth quarter 2024 earnings release.