Honeywell: The Spinoff No One Wanted?

10/13/17

Honeywell (HON) has completed its portfolio review. Recall that Dan Loeb’s Third Point hedge fund is an activist investor here pushing for the company to spin off its aerospace business. The company announced the results of its ‘review’ and instead of embracing Loeb, it’s decided to keep the aerospace business and dump two much smaller businesses.

The company has decided to spin off the home/ADI global distribution and the transportation business into separate (publicly traded) companies by 2019. The two collectively generate $7.5 billion in sales - compared to the $40 billion the entire Honeywell company generates.

The move will likely be enough to keep Loeb at bay. It isn’t the full-blown aerospace spin off but it at least unlocks some value at the company. Which comes at a time where shares are still trading at all-time highs.

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