Honeywell’s Game-Changing Spin-Off: Automation, Aerospace, and Solstice Take Flight (HON, SOLS)

Neil Sharma
6 days ago
6 min read

Honeywell’s transformation is rooted in a focused strategy aimed at aligning its operations with three long-term megatrends: the global push for industrial automation, the ongoing modernization of aerospace technology, and the increasing demand for sustainable materials. This move comes after a full-scale portfolio review led by CEO Vimal Kapur and signals a future where each business can operate with more clarity and accountability.

According to Honeywell’s leadership, this separation is designed to deliver:

Enhanced operational focus
Tailored capital allocation and financing options
More nimble and specialized management teams
Clearer investment profiles for shareholders

Rather than housing diverse operations under one corporate structure, Honeywell aims to allow each business to respond faster to its market dynamics, pursue bolt-on acquisitions, and innovate with more agility.

Phase 1: Advanced Materials Spin-Off (November 2025)

The first step commenced in 2024, when Honeywell announced plans to spin off its Advanced Materials division. This unit, renamed Solstice Advanced Materials, is centered on sustainability-focused specialty chemicals and cutting-edge materials that serve industries such as refrigeration, electronics, healthcare, and defense.

Solstice is expected to begin trading as an independent entity, with an assumed open date of October 30, 2025. Solstice to trade on a when-issued basis, beginning around October 20th. Shareholders will receive 1 share of Solstice for every 4 shares of Honeywell owned.

Key Highlights of Solstice:

Portfolio includes Solstice®, Spectra®, Hydranal®, Aclar®, Genetron®, Fluka®
Operations include 21 manufacturing facilities and four R&D sites
Backed by 3,900 employees with deep domain knowledge
Built to benefit from secular trends in AI, semiconductor demand, and climate regulation

Solstice will be split into two operating segments:

Refrigerants & Applied Solutions (RAS): Includes low-global-warming-potential refrigerants, blowing agents, solvents, and aerosol materials. This segment alone accounted for $2.7 billion in 2024 sales.
Electronic & Specialty Materials (ESM): Provides semiconductor materials, fibers, and packaging used in high-performance computing, medical packaging, and defense tech.

Solstice has already scheduled an Investor Day on October 8, 2025, in New York City to showcase its business model, future strategy, and financial expectations.

Solstice Advanced Materials is not just a rebranded division of Honeywell; it is launching with an operational and strategic identity shaped around innovation in sustainability and high-performance chemistry. The company’s focus extends beyond traditional applications, diving deep into industries where material science is transforming market demands. For example, the refrigerants business under Solstice® is closely aligned with tightening global regulations around environmental impact, including the phasedown of high-global-warming-potential substances under the Kigali Amendment. Solstice is poised to lead the charge with low-global-warming refrigerants and advanced alternatives that not only meet compliance standards but also enhance energy efficiency and system performance. Its position in these regulated and growing markets provides a reliable revenue base that’s expected to be resilient through economic cycles. By strategically reinvesting in R&D and manufacturing capacity, Solstice plans to scale its differentiated product lines across key segments like semiconductors and healthcare. This includes high-purity materials for chip manufacturing and protective packaging solutions for pharmaceutical logistics. In essence, Solstice is entering the public market as a growth-oriented, margin-strong company with proven brands, scalable infrastructure, and exposure to powerful global trends in technology, health, and environmental sustainability. With expected 2024 net sales of $3.8 billion, net income of $0.6 billion, and adjusted EBITDA of $1.1 billion, Solstice enters the market as a strong contender in the specialty materials space.

Phase 2: Automation and Aerospace Separation (February 2025)

Following the Advanced Materials announcement, Honeywell’s board unveiled in February 2025 that it would also separate its Automation and Aerospace businesses. This decision was the result of a year-long portfolio review and is viewed as a transformative step that will reshape Honeywell into three focused, independent public companies.

Honeywell Automation

As a standalone entity, Honeywell Automation will be one of the largest pure-play automation firms globally, with $18 billion in 2024 revenue. It will focus on:

Industrial process control
Building systems and infrastructure automation
Software-driven AI and autonomous technologies
Cybersecurity for connected systems
Smart energy and sustainability-focused platforms

Honeywell Automation’s technologies are embedded across high-growth sectors like life sciences, oil and gas, commercial real estate, and logistics. With a vast installed base and decades of innovation, the new company is positioned to lead in the transition from traditional automation to full autonomy.

Honeywell Aerospace

Honeywell Aerospace, with $15 billion in revenue in 2024, provides:

Aircraft propulsion systems
Flight control and cockpit technologies
Avionics and communication systems
Auxiliary power units (APUs)

Its products are found in nearly every commercial, cargo, and defense aircraft globally. As demand for commercial and defense aviation rises post-pandemic, the standalone aerospace firm is expected to benefit from:

Increased electrification of aircraft
Rising demand for unmanned and autonomous flight systems
International defense modernization and fleet upgrades

Both spin-offs are intended to be completed in a tax-free manner for shareholders, with the full separation process concluding in the second half of 2026.

What About the Remaining Honeywell?

After all three spin-offs are completed, Honeywell itself will not cease to exist. The core Honeywell entity will likely retain certain centralized functions and possibly serve as a holding structure or innovation hub. However, its precise post-separation configuration has yet to be confirmed by leadership.

Investors should expect further announcements regarding:

Governance structures
Ticker symbol changes (if any)
Financial restatements or reclassifications
Capital return strategies, such as dividends or buybacks, for the new entities

Phase 3: Progress Toward Execution (Mid to Late 2025)

In August 2025, Honeywell filed its Form 10 with the SEC for Solstice and began preparing for the spin-off by assembling a dedicated management team and board of directors for the new company. David Sewell was appointed President and CEO of Solstice and has since emphasized the company's focus on:

Partnered innovation with customers
Resilient margin management through the Solstice Accelerator operating model
Long-term capital discipline and strategic investments

Meanwhile, the Automation and Aerospace teams have begun internal realignments. Reports indicate the businesses are developing separate capital plans, tech roadmaps, and hiring pipelines in anticipation of their independent futures.

What This Means for Investors

Honeywell’s spin-off strategy reflects a broader trend among conglomerates that are rethinking structure to boost valuation and performance. For investors, this separation offers both opportunity and complexity.

Benefits:

Three different investment options tailored to individual risk-return profiles
More transparency in operational and financial reporting
Tax-free distributions of stock in newly listed companies
Higher potential for long-term total shareholder return

Risks:

Execution risk during the separation period
Possible volatility during listing transitions
Sector-specific exposures (e.g., materials price cycles, defense budget shifts, industrial demand)

Investors should watch the Investor Day events, quarterly filings, and future Form 10s closely as Honeywell finalizes the Aerospace and Automation separation steps.

Final Word: A Historic Restructuring With Long-Term Implications

Honeywell’s spin-off strategy isn’t just about cutting complexity. It’s about unlocking growth potential in three powerful and future-facing sectors. By the end of 2026, investors will have the option to back a precision-focused automation innovator, a global aerospace tech leader, and a specialty materials company riding the wave of climate and digital transitions.

Whether you’re looking at it from a shareholder perspective or watching industry shifts, Honeywell’s restructuring is a signal of where the future is headed.

FAQ

What is the timeline for Honeywell’s spin-offs?

Solstice is scheduled to complete its spin-off by late 2025. Automation and Aerospace are expected to separate in the second half of 2026.

How will shareholders receive shares in the new companies?

Each spin-off is structured to be tax-free. Existing Honeywell shareholders will receive shares in the new public companies based on a distribution ratio to be announced closer to the spin-off dates.

Will the new companies be listed separately on stock exchanges?

Yes. Each will be publicly traded and operate with its own management, board, and financials.

Will Honeywell change its name or ticker?

There is no confirmed plan for Honeywell to change its name or ticker at this time. Future announcements may clarify the structure of the remaining parent entity.

Is this part of a larger trend in the industrial sector?

Yes. Other conglomerates like GE and Johnson & Johnson have undertaken similar moves to break into focused, high-growth segments.

Financial Disclaimer

This article is for informational purposes only and does not constitute financial, investment, or legal advice. Investors should conduct their own due diligence and consult a licensed financial advisor before making any investment decisions.

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