Honeywell to spin off units, keep aerospace

LONDON — The U.S. technology and manufacturing company Honeywell announced Tuesday that it plans to spin off parts of its business but retain its aerospace-technology operation, against the recommendations of an activist investor.

Early signs are that the changes will not affect the company’s Ohio operations, which include about 3,000 employees and about 20 locations.

Honeywell had been under pressure to pursue an overhaul after Daniel S. Loeb, the activist investor in charge of the hedge fund Third Point, urged it to spin off the aerospace unit.

Honeywell rejected that, however, and said it will instead split off its homes and global-distribution unit, which generates about $4.5 billion in annual revenue, and its transportation-systems unit, which produces about $3 billion in revenue, into two publicly traded companies by the end of 2018.

The homes business will deal with heating, ventilation and air-conditioning and the distribution of security and fire-protection products. It will be run by Gary S. Michel, who has moved from the manufacturer Ingersoll Rand, Honeywell said.

The transportation business will focus on technologies used in cars, trucks and other vehicles.

Honeywell’s Ohio locations include several in central Ohio. The company’s largest presence in the state is in Mason in the Cincinnati area, where there are about 700 employees, according to spokesman Scott Sayres.

None of the Ohio locations is involved in the spinoff plans, Sayres said. However, he added that the changes are still in early stages, and many details have not been finalized.

The separated operations would be “better positioned to maximize share-owner value through focused

strategic decision-making and capital allocation tailored for their end markets,” Honeywell President and CEO Darius Adamczyk said in a news release.

The company indicated that more deals could be ahead.

“Honeywell will also have multiple levers for continuing to execute an aggressive capital-deployment strategy,” including a “vigorous and disciplined” mergersand-acquisitions program, Adamczyk said.

The move comes after United Technologies, which had rejected a deal with Honeywell, agreed in September to buy the airplane-parts maker Rockwell Technologies for $30 billion, including debt.

During its pursuit of United, Honeywell had argued that combining the companies would create a “well-balanced portfolio” of sales across the aerospace, homes and buildings, military contracting and energy sectors.