The multinational American conglomerate, Honeywell, recently had a massive announcement saying that they are planning to spin off their non-core asset to at least two new publicly listed companies. According to the U.S. industrial conglomerate, this will be the biggest and the first major shakeup that the company decided to do.
The asset spin-off is a short plan or rather, an announcement after one major news that they also recently announced which was about the increased in the conglomerate’s annual dividend. Honeywell announced that they are going to increase their annual dividend by a whopping 12%; now, the company is looking to streamline its businesses according to sources.
News and sources have pointed that the company would go over on one of its shareholders, Third Point LLC. According to sources, Honeywell needs to trim down couple billions of dollar worth of assets in order for them to spin off their aerospace division. Sources have been citing that the plan involves the turbochargers business.
Currently, the company’s turbocharger business holds the production of several components that are used to improve the cars and trucks’ performance and efficiency, and the sector is under and is part of the Aerospace sector. What Honeywell wants is to create a separate division or an entirely new business.
Additional information about the next possible asset that the company is looking to spin off is still inside closed corridors and Honeywell remains oblivious in naming the other one. According to the company, the additional information is completely confidential and was still up for deliberations.
More on Honeywell’s Spin-Off
Honeywell is expecting to announce the spin-off somewhere around next week although rumors are surfacing that the announcement might be delayed. On the other hand, Honeywell declined to comment on any of the information.
The company’s market capitalization is currently tallied to be at the $109 billion and they currently offer energy efficient products and solutions for homes, specialty chemicals, electronic and advanced materials. They also offer safety and security technologies for buildings, homes, and other industries.
Analysts on Honeywell’s Spin-Off and Shares Performance
The New York-based investment adviser company Third Point noted that there is a big opportunity in Honeywell’s performance due to the fact that it is still completely undervalued in the industrial automation market. Understanding the whole spin-off of the aerospace business would then open a whopping $20 billion in shareholder value.
The company’s shares are currently up in the market due to their recent announcement, despite having an official public announcement. The company is running bullish these past few weeks, the announcement and deals that they are scoring are completely being supported in the market and analysts are taking them as great performance milestone.
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