Exclusive: Honeywell prepares to spin off businesses -
sources
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[October 09, 2017]
By Greg Roumeliotis
(Reuters) - Honeywell International Inc
plans to spin off non-core assets and create at least two new publicly
listed companies, as the U.S. industrial conglomerate seeks to
streamline its business, according to people familiar with the matter.
The move would represent the first major shakeup at the Morris Plains,
New Jersey-based company since Darius Adamczyk succeeded David Cote as
chief executive in April. It comes after Honeywell said in September it
would raise its annual dividend by 12 percent.
The sources said on Sunday that while Honeywell would defy calls by one
of its shareholders, activist hedge fund Third Point LLC, to spin off
its aerospace division, it would still seek to carve out assets worth
several billions of dollars.
Honeywell is considering placing its turbochargers business, which
produces components that improve the performance and efficiency of cars
and trucks, into one of the newly created companies, the sources said.
Honeywell lists turbochargers as part of its aerospace business.
The sources did not disclose which other assets Honeywell was looking to
spin off and asked not to be identified because the deliberations were
confidential.
Honeywell is hoping to unveil the spinoff plan as early as this week,
though the announcement could be delayed, the sources added.
Honeywell, which has a market capitalization of $109 billion, declined
to comment.
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A view of the corporate sign outside the Honeywell International
Automation and Control Solutions manufacturing plant in Golden
Valley, Minnesota, January 28, 2010. REUTERS/Eric Miller
Honeywell's businesses include energy efficient products and solutions
for homes, specialty chemicals, electronic and advanced materials, and
sensing, safety and security technologies for buildings, homes and
industries.
Third Point has argued that Honeywell is undervalued compared to peers
in industrial automation, and that spinning off the entire aerospace
business would create $20 billion in shareholder value.
Honeywell's aerospace business, its biggest, also makes auxiliary power
units and engines for aircraft manufactured by companies such as
Bombardier Inc <BBDb.TO>, Textron Inc <TXT.N> and General Dynamics Corp
<GD.N>.
Last year, Honeywell approached peer United Technologies Corp <UTX.N> to
discuss a potential combination but was rebuffed. Last month, United
Technologies struck a $30 billion agreement to buy avionics and
interiors maker Rockwell Collins Inc <COL.N>. Analysts have said this
deal positions United Technologies to also spin off assets down the
line, though no such deal has been announced.
(Reporting by Greg Roumeliotis in New York; Additional reporting by
Alwyn Scott in New York; Editing by Richard Chang)
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