An activist investor with a $5 billion stake in Honeywell International Inc. is calling for the company to separate its aerospace and automation divisions into separate businesses, stating it would unlock additional shareholder value and improve its performance when compared with industry peers.
In a letter to Honeywell on Tuesday, New York-based Elliott Investment Management wrote that Honeywell’s “conglomerate structure” no longer suits the company and “uneven execution, inconsistent financial results and an underperforming share price” have diminished its strong record of value creation over the last five years.
Elliott wrote the "time has come" for Charlotte, North Carolina-based Honeywell to "embrace simplification” by separating Honeywell Aerospace – which is headquartered in Phoenix – and Honeywell Automation into separate companies, each with valuations exceeding $100 billion. The business separation could result in a share price bump between 51% to 75% over the next two years.
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