Honeywell to Decide on Aerospace Spinoff by the Fall

By Thomas Gryta 

Honeywell International Inc. will decide whether to break off its aerospace division by the fall, the company said Tuesday, and it continues to work with advisers after activist Third Point LLC made a public push last month for a spinoff.

The division, Honeywell's largest, supplies parts for Airbus SE and Boeing Co. jets along with engines for aircraft made by Bombardier Inc., and Textron Inc. and others. In a letter to investors a month ago, Daniel Loeb's Third Point wrote that the business has lagged behind its peers and separating it "would result in a sustained increase in shareholder value in excess of $20 billion."

In slides posted before Honeywell's presentation at the Electrical Products Group conference in Florida, the company said it is "modeling various scenarios" as part of the review. Separately, it highlighted that Honeywell shares have outperformed rivals and the aerospace division is positioned for "sustainable growth" and margin expansion.

The activist push came just a few weeks after Honeywell switched leaders as Darius Adamczyk took over as Honeywell's CEO from longtime leader David Cote. Mr. Cote remains the company's chairman.

The company, which has a market value of roughly $100 billion, makes everything from aircraft landing gears to home thermostats. The aerospace business accounts for about 38% of its $39.3 billion in annual sales.

Honeywell shares have gained nearly 14% so far this year.

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

May 23, 2017 11:12 ET (15:12 GMT)

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