Honeywell to Divest Advanced Materials Division to Foster Growth

Honeywell has announced its intention to divest its Advanced Materials business by establishing it as an independent, publicly traded company in the United States. The completion of this spin-off is projected for the end of 2025 or early 2026. The company plans to execute this separation in a manner that will be tax-free for its shareholders, aligning with their strategic goals for growth and value creation.

As a top global supplier of specialty chemicals and materials with a focus on sustainability, this newly independent business will be strategically equipped to take advantage of a clearer focus and the financial agility needed to explore innovative projects and growth prospects across different investment cycles. The proposed spin-off is anticipated to enable Honeywell to further its strategic objectives, including driving organic growth, improving its Accelerator operating system, and optimizing its portfolio for better performance and value creation. This transition will allow both the new entity and Honeywell to concentrate on their individual goals, promoting sustainable development and long-term success.

“With the ongoing global demand for advanced specialty chemicals and materials, we believe that this is the ideal moment for this business to operate independently, capitalizing on its cutting-edge technologies and strong customer relationships. As a leader in the sector, this new company will be able to concentrate more on innovation, allowing it to create new, more sustainable solutions and products using next-generation chemistry, ultimately generating additional value for our shareholders,” stated Vimal Kapur, Chairman and CEO of Honeywell.

Kapur further emphasized, “Today’s announcement marks another significant advancement in the optimization of Honeywell’s portfolio, a primary focus I identified during my first year as CEO. By strategically pursuing targeted acquisitions and divesting high-quality but non-core business segments, we are actively refining our portfolio composition and strengthening Honeywell’s alignment with three major megatrends: automation, the future of aviation, and energy transition—supported by our Accelerator business models.”

The upcoming separation of the Advanced Materials division is a continuation of Honeywell's disciplined capital deployment strategy, which includes four recent acquisitions. The company is concentrating on high-return acquisitions that will support future growth across its portfolio, aligning with three significant megatrends. Over the past year, Honeywell has successfully acquired Carrier Access Solutions, Civitanavi, CAES, and the liquefied natural gas (LNG) business from Air Products.

Honeywell is well-positioned to exceed its pledge to allocate a minimum of $25 billion toward high-return capital expenditures, dividends, opportunistic share buybacks, and strategic acquisitions through 2025. As of now, the company has already deployed around $9 billion for acquisitions in 2024, demonstrating its commitment to enhancing shareholder value and driving growth.

Once the spin-off of the Advanced Materials division is finalized, Honeywell will be positioned to further enhance its organic sales growth, reduce capital intensity, diminish the cyclicality of its sales, and improve its capacity to generate free cash flow. This strategic move is expected to create a more streamlined focus and operational efficiency, ultimately benefiting the company's overall financial performance.

Following the spin-off, the Advanced Materials division will function as a sustainability-focused pure-play entity within the specialty chemicals and materials sector. It will maintain leading positions in key areas such as fluorine products, electronic materials, industrial-grade fibres, and healthcare packaging solutions, emphasizing its commitment to innovative and sustainable practices.

The proposed spin-off transaction is slated for completion by the end of 2025 or the beginning of 2026, contingent upon the fulfilment of various customary conditions.