Honeywell looks to sell off aerospace business
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Honeywell is exploring the potential separation of its Aerospace business.
This comes after a profit warning and the acquisition of the Cobham Advanced Electronic Systems business (CAES) in September and a deal to supply avionics to Canadian aircraft maker Bombardier in December.
This would leave the company with two focus areas, automation and the energy transition through deals with Qualcomm, NXP Semiconductors and Analog Devices. The company is expecting its full year revenues to be down 2%, rather than up 4% are previously forecast.
“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 Vimal Kapur, CEO of Honeywell.
“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.”
In the last year 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.
The Bombardier deal could be worth $17bn over its lifetime and includes the development of adaptable avionics as well as a focus on evolutions of power, reliability and maintainability, led by the next-generation model of Honeywell’s HTF7K engine.
“Working together, we will generate significant value for Bombardier’s operator base by providing the latest technologies to enable safe and efficient flight,” said Jim Currier, President and CEO of Honeywell Aerospace Technologies. “We are committed to investing in these key technologies with Bombardier, which will not only drive substantial growth for Honeywell, but lead the industry further into the future of aviation.”
The company has also 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. It spun out its fledgling quantum technology business into Quantinuum through a merger with Cambridge Quantum Computing in 2021.
Honeywell plans a further update on the spinout of its aerospace business in January 2025.
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