Activist investor Elliott Management has $5 billion Honeywell stake, seeks breakup

Core Viewpoint - Activist investor Elliott Management is advocating for Honeywell to split into two separate companies, focusing on its Aerospace and Automation business lines, believing this could unlock significant value for shareholders [2][3]. Group 1: Elliott Management's Position - Elliott Management holds a stake of over $5 billion in Honeywell and argues that the current conglomerate structure is outdated and detrimental to performance [1][3]. - The firm estimates that a breakup could lead to a potential upside of 75% over the next two years [3]. - Elliott's managing partners expressed that Honeywell has underperformed its industrial peers since 2019 due to a complicated corporate structure and poor investor communication [4]. Group 2: Honeywell's Business Performance - Honeywell is recognized for having a collection of high-quality businesses, with its Aerospace division being highlighted as the "crown jewel" [5]. - Despite its strengths, Honeywell has struggled to meet performance expectations in recent years, particularly under the leadership of current CEO Vimal Kapur, who has been in the role since 2023 [5]. - The company has been involved in significant M&A activities, acquiring businesses worth billions in 2024, despite a general downturn in M&A activity [3]. Group 3: Industry Context - Elliott's call for a breakup aligns with a broader trend in the industrial sector, where companies like General Electric, 3M, and Johnson Controls have also pursued divestitures or breakups [6]. - Elliott has a history of advocating for breakups in other companies, including Marathon Petroleum and Alcoa, indicating a consistent strategy in its investment approach [7].