Honeywell to Divest Advanced Materials Unit

Industrial manufacturing conglomerate Honeywell announced plans to spin off its Advanced Materials business into an independent, publicly-traded company by late 2025 or early 2026.

The advanced materials division offers specialty chemical and material products across industries, including: Solstice low-GWP technology, Spectra fibers used in armor, and Aclar pharmaceutical packaging. The division also provides carbon capture technologies, aiding regulatory compliance and sustainability efforts.

Honeywell said the unit is expected to generate between $3.7 billion and $3.9 billion in revenue in 2024 with an operating margin of over 25%.

“Given the sustained market demand for advanced specialty chemicals and materials around the globe, we are confident now is the right time for this business to grow independently, leveraging its leading technologies and deep customer relationships,” Honeywell Chairman and CEO Vimal Kapur said in an Oct. 8 news release.

The company said the spin-off is designed to be tax-free for Honeywell’s shareholders and aims to provide strategic flexibility and enhanced capital allocation for both companies post-separation.

“Through the powerful combination of strategic bolt-on acquisitions and subtractions of high quality but non-core business lines, we continue to enhance our portfolio mix and further tighten Honeywell’s alignment to three compelling megatrends: automation, the future of aviation, and energy transition—underpinned by our Accelerator business models,” Kapur added.

Honeywell completed four acquisitions in the last 12 months to align with its capital deployment strategy, including: Carrier Access Solutions, Civitanavi, CAES and Air Products’ liquified natural gas (LNG) business.

Honeywell plans to name a management team and board for the new entity closer to the completion of the spin-off.

The announcement comes after Honeywell lowered its annual profit forecast in July. However, the company’s shares rose 0.5% in early trading following the spin0ff news, though they remain down 3% for the year.