Elliott Management Advocates Honeywell Breakup

Elliott Investment Management has acquired a stake of over $5 billion in Honeywell International, urging the company to split into two separate entities: Aerospace and Automation. The activist investor claims that such a breakup could unlock significant shareholder value, estimating share price increases of 51% to 75% over the next two years due to improved focus and management. Elliott argues that Honeywell’s current conglomerate structure is outdated and hampers growth, echoing trends seen in other industrial firms like General Electric. Honeywell has faced underperformance and lower-than-expected sales, prompting Elliott's intervention. The hedge fund, now the largest active investor in Honeywell, emphasizes that a separation could enhance operational performance and capital allocation. Honeywell shares have already risen over 12% this year, reflecting positive market sentiment towards the proposed changes.