The diversified manufacturer is keeping the bulk of its aerospace business and spinning off its home and transportations units. Fred Katayama reports.
Big makeover at Honeywell. The diversified manufacturer is spinning off two units - its home and global distribution business ..and its transportation business. That'll create two publicly-traded companies by the end of 2018. Those two units generate annual revenue of nearly $8 billion. Brian Langenberg of Lagenberg & Company: SOUNDBITE: BRIAN LANGENBERG, ANALYST, LANGENGBERG & COMPANY, (ENGLISH) SAYING: "It's incremental. I don't have reservations. It's one of those things you can do. You didn't have to do it. On the home spin, it does make sense in that on the margin that business has not been growing at a 3, 4, 5 percent rate." Honeywell is retaining its aerospace technology business. That move defies the campaign by activist investor Dan Loeb of Third Point Capital to spinoff that division that makes up more than a third of revenue. William Blair analyst Nick Heymann said, "This gives the parent flexibility to engage in M&A. That's where the focus is. They want to become a software-driven company." By divesting its transportation business, Honeywell sheds technology tied to the internal combustion engine at a time when regulators look favorably on electric vehicles. Its other unit provides services that range from home heating to security and fire protection products. Honeywell shares fell moments after the market open Tuesday.