Activist investor Elliot Investment Management invested more than $5 billion in Honeywell International and is calling for the company to split into two separate companies.
In a letter to Honeywell shareholders, Elliott said that the Charlotte, NC-based company needs to simplify its structure, citing issues with uneven execution, inconsistent financial results and an underperforming stock price.
Elliott recommended that Honeywell separate its automation and aerospace divisions.
The company said that as independent companies, Honeywell Aerospace and Honeywell Automation would gain from streamlined strategies, focused leadership, improved capital allocation, enhanced operations performance and stronger oversight.
Elliot said that separating Aerospace and Automation could lead to share-price gains of 51% to 75% over the next two years.
On Oct. 8, the industrial manufacturing conglomerate Honeywell announced plans to spin off its Advanced Materials business into an independent, publicly-traded company by lates 2025 or early 2026.
To read more, see Elliott’s letter here.
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