The 138-year-old U.S. industrial giant Honeywell, which started as a thermostat business, has established a strong market position in multiple fields such as aerospace, automation, and energy. However, in recent years, intensifying global market competition and increasing shareholder demands for business performance have put Honeywell under pressure to sustain growth.

Recently, Honeywell announced a major business restructuring plan, deciding to fully spin off its automation and aerospace technology businesses. Based on the previously announced split plan for the advanced materials segment, this will ultimately result in the formation of three independent, publicly traded companies with different strategies and growth drivers. This plan, initiated by Chairman and CEO Vimal Kapur a year ago, aims to create greater long-term value for shareholders by simplifying the business structure and enhancing strategic flexibility.

According to the plan, the spin-off of the advanced materials business is expected to be completed by the end of 2025 or early 2026, while the spin-offs of the automation and aerospace technology businesses will be completed in the second half of 2026. The spin-offs will be conducted in a tax-free manner for shareholders, ensuring the maximization of their interests.

Honeywell stated that the three spun-off companies will focus on automation, aerospace, and advanced materials, respectively. This will enable them to better leverage their respective advantages and resources, formulate more flexible and targeted development strategies, thereby providing better services to customers and creating greater value for shareholders.

Since Vimal Kapur officially became Honeywell's CEO in June 2023, he has been committed to optimizing the business portfolio and focusing on three key development trends: automation, future aviation, and energy transformation. To strengthen its advantages in industrial automation and aviation, Honeywell has implemented a series of strategic initiatives, including approximately $9 billion in value-added acquisitions and the divestiture of its personal protective equipment business.

Despite achieving good performance in 2024, Honeywell's share price has not kept pace with the gains of the S&P 500 Industrial Index. Behind this spin-off plan, activist investment firm Elliott Investment Management also played a key role. Elliott holds a significant stake in Honeywell and hopes to enhance the company's value through the spin-off.

The three spun-off companies are expected to achieve significant revenue and profit margins. Among them, the aerospace business will become one of the world's largest aviation suppliers, while the automation and advanced materials businesses will also improve operational efficiency and market competitiveness through targeted efforts.

Honeywell's spin-off plan not only marks its transition from a diversified conglomerate to a more specialized, flexible, and agile development model, but also provides its various business segments with opportunities to focus on their core businesses. As the spin-off plan progresses, Honeywell is expected to achieve new breakthroughs and innovations in different fields, injecting new vitality and momentum into its overall future development. However, the success of the spin-off still depends on the company's strategic planning and execution capabilities. Honeywell needs to carefully plan and effectively implement this plan to ensure that the spun-off companies can continue to develop steadily and create greater value.