Honeywell to Spin Off Advanced Materials Business, Creating a New U.S. Publicly Traded Company!

Honeywell has announced its plan to spin off its Advanced Materials business into a separate, publicly traded company by late 2025 or early 2026. The new company will focus on sustainability-driven specialty chemicals and materials, positioning itself as a leader in sectors such as fluorine products, electronic materials, industrial fibers, and healthcare packaging solutions.

The spin-off, designed to be tax-free for Honeywell shareholders, will allow the company to enhance its strategic priorities of accelerating organic growth, evolving its Accelerator operating system, and optimizing its portfolio. Vimal Kapur, Chairman and CEO of Honeywell, emphasized that the sustained demand for advanced specialty chemicals and materials globally makes this the ideal time for the business to grow independently. As a standalone entity, the Advanced Materials business will have a sharper focus on innovation and sustainability, leveraging next-generation chemistry to develop groundbreaking products.

The planned spin-off aligns with Honeywell’s ongoing portfolio optimization efforts. Kapur highlighted the company’s strategy of focusing on three powerful megatrends: automation, the future of aviation, and energy transition. Through acquisitions and divestitures, Honeywell has continued to refine its portfolio to better align with these growth areas.

The Advanced Materials business is expected to generate between $3.7 billion and $3.9 billion in revenue in FY2024, with an EBITDA margin exceeding 25%. The business’s product range includes innovations such as the Solstice hydrofluoro-olefin (HFO) technology, which has significantly contributed to reducing greenhouse gas emissions. It also produces high-performance materials like Spectra fibers for armor protection and Aclar for healthcare packaging.

Upon completion of the spin-off, the Advanced Materials business will benefit from greater strategic and financial flexibility, enabling it to pursue growth opportunities independently. Meanwhile, Honeywell will continue to focus on organic sales growth, lowering capital intensity, reducing sales cyclicality, and enhancing free cash flow.

The transaction is subject to customary regulatory approvals, and Honeywell intends to provide further details on the management team and board for the new company as the process advances.

Goldman Sachs & Co. LLC is serving as Honeywell’s financial advisor, while Skadden, Arps, Slate, Meagher & Flom LLP is providing legal counsel. The move marks the latest step in Honeywell’s long-term strategy to strengthen its business by optimizing its portfolio and focusing on high-growth, high-return areas.