Elliott Investment Management
Assembly Line
Elliott takes more than $5B stake in Honeywell, advises separating automation, aerospace units
Activist investor Elliott Investment Management has taken a more than $5 billion stake in Honeywell International and is calling for the industrial conglomerate to split into two separate companies. In a letter sent to Honeywell’s board, Elliott said that the Charlotte, North Carolina-based company needs to simplify its structure as it deals with uneven execution, inconsistent financial results and an underperforming stock price.
The activist investor believes splitting up the aerospace and automation businesses would result in share-price gains of 51% to 75% over the next two years. Over the past five years, the stock has gained about 7% on an annualized basis, or less than half the S&P 500 return.