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Honeywell ‘plans non-core asset spin-off’
Posted on Monday, 09 October 2017 14:22
New Jersey-headquartered conglomerate Honeywell intends to separate non-core assets into two separate businesses, according to Reuters.
Citing people familiar with the situation, the news provider said the move comes as the company moves to streamline its existing operations.
As a consequence of the decision, Honeywell’s non-core activities will be demerged into two publicly-traded units.
No specifics on the two entities have been disclosed at this time, but Reuters’ sources, who did not wish to be identified as the matter is private, said the firm’s turbochargers division could be among the assets likely to be spun-off.
They added that, in spite of calls from an activist investor for the aerospace unit to be demerged, it will probably be retained; in April of this year hedge fund Third Point stated that it believes Honeywell is undervalued and should spin off its aerospace division.
According to the shareholder, doing so could generate value for shareholders to the tune of over USD 20.00 billion.
Reuters’ sources said an official statement on the planned asset spin-off is expected to be released later this week, although they cautioned that the announcement may be delayed.
For now, Honeywell has declined to comment on the report.
Should it go ahead with an asset divestment, it would not be the first time the group has jettisoned certain activities in recent years; in August 2016 it agreed to offload Honeywell Technology Solutions to KBR for USD 300.00 million.
The company manufactures consumer products, while providing engineering services and aerospace systems. Its range includes output such as a line of home thermostats.
According to its website, almost 50.0 per cent of its revenue is due to energy efficient products and the firm employs some 131,000 people at 1,300 sites.
Honeywell posted net sales of USD 19.57 billion for the six months to the end of June 2017, up from USD 19.51 billion over the corresponding timeframe of 2016.
Net income for the period totalled USD 2.73 billion in H1 2017, widened from net income of 2.55 billion in the first half of last year.
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