MORRIS PLAINS, N.J. (AP) — Honeywell is spinning off businesses with annualized sales of more than $7 billion, but holding on to its lucrative aerospace division.
Becoming two separate and publicly traded companies, Honeywell said Tuesday, are its homes product portfolio and ADI global distribution business, along with its transportation systems business.
Activist investors, most notably Dan Loeb's Third Point, pushed Honeywell to spin off its aerospace division last April. Honeywell said that it reviewed those proposals, but ultimately decided it would be better for the company to hold on to its defense business.
In a conference call Tuesday, Honeywell CEO Darius Adamczyk said that the aerospace is poised for growth.
Global tensions are on the rise due to conflicts in the Middle East and a potential conflict with North Korea.
Shares of Honeywell are up 24 percent this year, and they trail by a wide margin shares of other defense companies like Rockwell Collins, Boeing and Raytheon.
"I am thrilled by what we have in aerospace," Adamczyk said. "It's a great player and it's going to continue to win the marketplace."
The homes and global distribution business will include home heating, ventilation and air conditioning controls and security markets and security and fire protection products. It will have about 13,000 employees. The transportation systems business will serve a range of engine types across global automobile, truck and other vehicle markets. It will have about 6,500 workers.
Honeywell International Inc., based in New Jersey, expects the restructuring will be completed by the end of next year. It also boosted the low end of its full-year earnings forecast.