Honeywell Plans to Spin Off Advanced Materials Unit

Investing.com — Honeywell (NASDAQ:HON) is expected to announce plans to spin off its advanced materials unit in a tax-free separation, according to The Wall Street Journal, citing sources familiar with the matter.

The division could be worth over $10 billion as a separately traded public company and is on track to contribute approximately 10%, or about $3.8 billion, of Honeywell's total sales this year.

The materials business specializes in everything from polymers to performance fluids and employs over 3,000 people, according to Honeywell's website. By separating this unit, Honeywell aims to provide increased financial flexibility for both the new company and the remaining entity.

Based in North Carolina, Honeywell is a large industrial conglomerate with operations that range from aerospace to building automation. Its current market capitalization is about $132.4 billion.

Shares in Honeywell rose by more than 2% in premarket US trading.

Chief Executive Officer Vimal Kapur, who took over in June 2023, is focused on streamlining Honeywell’s portfolio toward aviation, automation, and energy divisions. During his tenure, he has led several acquisitions, including a $5 billion deal for Carrier Global (NYSE:CARR)'s security business, a $2 billion acquisition of defense technology firm CAES Systems, and a $1.8 billion acquisition of liquefied natural gas process technology group Air Products (NYSE:APD).

In July, Honeywell lowered its annual profit forecast due to reduced demand in its industrial automation segment, which was affected by lower volumes while it worked to offload existing inventory.

The company now projects an annual adjusted profit of $10.05 to $10.25 per share, a decrease from its earlier forecast of $10.15 to $10.45 per share.

(Reuters contributed reporting.)