What Does Honeywell Breakup Mean for Smart Buildings, AI Data Centers and Sustainable IT Services Partners?
February 6, 2025 by Joe Panettieri
Honeywell, facing pressure from activist investor Elliott Investment Management, plans to break itself up into three publicly traded companies by the second half of 2026. One of the resulting companies, called Honeywell Automation, will focus extensively on smart buildings, technology, data center customers, and associated sustainable IT strategies.
Post breakup, the three resulting companies will be:
Rumors of a potential Honeywell breakup have swirled for months. Some pundits say the strategy seeks to emulate General Electric, which successfully broke itself up into healthcare technology, aerospace, and energy generation businesses in 2024.
Vimal Kapur, CEO, Honeywell
The Honeywell breakup announcement surfaced the same day as the company's quarterly results. Sales were $10.1 billion in Q4 of 2024, up 7% compared to Q4 of 2023. Dig a little deeper and:
Aerospace Technologies sales were $15.5 billion for 2024, up 13% from 2023;
Industrial Automation sales were $10.1 billion for 2024, down 7% from 2023;
Building Automation sales were $6.5 billion for 2024, up 8% from 2023; and
Energy and sustainability solution sales were $6.4 billion, up 3% from 2023.
The overall Q4 2024 financial results disappointed investors, and Honeywell's stock ($HON) fell about 6.5% on the earnings and breakup news.
Honeywell Automation: Where Sustainable IT Services Fit In
Looking ahead, the "big value" opportunity involves the Honeywell Aerospace business, Bloomberg Radio reported.
However, Honeywell Automation is the standalone business to watch for channel partners and IT service providers, Sustainable Tech Partner believes.
Among the reasons: Honeywell Automation sees artificial Intelligence (AI), cloud services and 5G networks driving a "technology trifecta." The trifecta will shift the world from automation to autonomous systems, where "systems can make decisions and suggestions based on conditions in the environment, whether that means adapting to a machinery malfunction, adjusting to an unexpected resource shortage or another unforeseen issue," the company said.
Marc Steinberg, partner, Elliott Investment Management
With that opportunity in mind, Cisco Systems and Honeywell in August 2024 reinforced their smart building partnership to help customers improve energy efficiency while reducing carbon emissions.
Honeywell Breakup: Executive Perspectives
In a prepared statement about the breakup, Honeywell CEO Vimal Kapur said: "The formation of three independent, industry-leading companies builds on the powerful foundation we have created, positioning each to pursue tailored growth strategies, and unlock significant value for shareholders and customers .Our simplification of Honeywell has rapidly advanced over the past year, and we will continue to shape our portfolio to create further shareholder value. We have a rich pipeline of strategic bolt-on acquisition targets, and we plan to continue deploying capital to further enhance each business as we prepare them to become leading, independent public companies."
Added Elliott Partner Marc Steinberg and Managing Partner Jesse Cohn: "With today's action, Honeywell will be separating its Automation and Aerospace businesses into two market-leading enterprises poised for sustained growth and value creation. The enhanced focus, alignment, and strategic agility enabled by this separation will allow Honeywell to realize the opportunity for operational improvement and valuation upside. We look forward to continuing to support Vimal and the management team as they execute on the separation and deliver significant long-term value to Honeywell's shareholders."
Honeywell Automation: IT Partnership Updates
So what's next? We'll be watching to see if or how Honeywell Automation surfaces at key channel partner conferences, such as Cisco Partner Summit 2025, which is scheduled for November 3-5 in San Diego, California.
Sustainable Tech Partner is a digital media platform and online community. Our content empowers technology partners and their customers to achieve a sustainable future.
