Honeywell, a major American industrial conglomerate, is splitting into three companies, following the trend of other manufacturing giants like General Electric and Alcoa. The move aims to create more agile and focused entities.
Honeywell , a prominent American industrial conglomerate, is embarking on a major restructuring by splitting into three distinct companies. This move follows a trend observed among manufacturing giants like General Electric and Alcoa , who have also opted to simplify their structures. Honeywell 's decision to separate its automation and aerospace technologies businesses comes after the company announced plans to spin off its advanced materials business earlier.
This strategic move aims to create three smaller, more agile entities, each with the potential to pursue tailored growth strategies. The company, known for producing a wide range of products from eye solutions to barcode readers, has been actively seeking ways to enhance its nimbleness. Under the leadership of CEO Vimal Kapur, who assumed the role a year and a half ago, Honeywell has undertaken several initiatives, including announcing plans for the advanced materials business spinoff, entering into an agreement to sell its personal protective equipment business, and making strategic acquisitions. Elliott Investment Management, a firm with a significant stake in Honeywell, had been advocating for the separation of its automation and aerospace businesses. They disclosed their substantial holding, exceeding $5 billion, shortly before the official announcement of the planned split.The board of Honeywell International Inc. has been actively exploring strategic options for the company since early 2024. The separation of the automation and aerospace technologies businesses is projected to be finalized in the second half of 2026, while the spinoff of the advanced materials business is anticipated to be completed by the end of this year or early next year. Honeywell's transformation mirrors a broader trend in the corporate world, as other U.S. conglomerates, facing pressure from shareholders, are simplifying their structures. The shift aims to empower individual segments to operate more freely and adapt to evolving market conditions. This move away from the traditional conglomerate model, once championed by industry leaders like Jack Welch of General Electric, reflects the increasing importance of agility and specialization in a rapidly changing digital economy. Metals maker Alcoa, in 2015, split into two independent companies, separating its bauxite, aluminum, and casting operations from its engineering, transportation, and global rolled products businesses. GE, in 2021, announced its own division into three public companies focused on aviation, healthcare, and energy, a move widely interpreted as a potential harbinger of the decline of conglomerates.
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