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(Added details of letter in paragraphs 4 and 5, and Honeywell’s response in paragraph 6)
Activist investor Elliott Investment Management has called for a split from Honeywell
HON.O in its aerospace and automation businesses on Tuesday, after saying it had accumulated a stake of more than $5 billion in the industrial giant.
In a letter to the company’s board, Mr. Elliott said Honeywell would benefit from simplified strategies. Last month, Honeywell forecast weak annual sales due to continued supply chain disruptions and weakness in its industrial automation business.
Shares of Honeywell rose 5.5% in early trading. They have gained 7.4% since the start of the year, at the last close.
“Over the past five years, patchy execution, inconsistent financial results and an underperforming share price have weakened its excellent track record of value creation,” Mr Elliott said.
As independent entities, they would benefit from focused management, better capital allocation and better operational performance, among others, the activist investor said.
“While Elliott did not share his views with us before today, we look forward to engaging with the company to get their thoughts,” Honeywell communications manager Stacey Jones said in a press release.
Since Vimal Kapur took over as CEO last year, Honeywell has embarked on a series of transactions to focus on the megatrends of automation, the future of aviation and the energy transition. She also got rid of assets that don’t fit these trends.
Last month, the company announced plans to spin off its advanced materials unit into a publicly traded company. Separately, it also said it was looking to divest its personal protective equipment business.
