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By simplifying the company’s structure, Kapur aims to increase the focus and flexibility of Honeywell’s growth initiatives.
The Wall Street Journal report highlighted the deal is expected to position the business as a separately traded public company with a potential value exceeding $10 billion.
The advanced materials business manufactures polymers, performance fluids, and additives. In 2024, it generated approximately $3.8 billion in revenue with an EBITDA margin greater than 25%.
The Wall Street Journal highlighted that the business unit’s sales accounted for around 10% of Honeywell’s overall revenue.
The decision to spin off the advanced materials segment is seen as a strategic move to provide Honeywell and the new entity with enhanced financial flexibility.
Honeywell targets a tax-free spin-off to shareowners to be completed by the end of 2025 or early 2026.
It follows a broader trend among industrial conglomerates to simplify operations in response to investor demands for clearer business models.
Honeywell recently increased its annual cash dividend from $4.32 to $4.52 per share.
The increase would apply to the fourth-quarter dividend of $1.13 per share, payable on December 6, 2024, to holders of record as of the close of business on November 15.
Price Action: At last check Tuesday, HON stock was up 1.76% at $206.90 during the premarket session.
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