Honeywell (NYSE: HON) has announced it will spin off the industrial conglomerate’s ADI global distribution business, Homes portfolio and transportation systems business into two publicly traded firms by the end of 2018.
Darius Adamczyk, president and CEO of Honeywell, said in a statement published Tuesday the initiative comes after the company reviewed its market dynamics, growth outlook and financial performance.
Honeywell expects the new independent homes and global distribution business to generate approximately $4.5 billion in annual revenue and run with 13,000 employees with a focus on delivering heating, ventilation and airconditioning controls as well as security and fire protection tools to customers.
The transportation systems business, which is expected to record approximately $3 billion in annual revenue, will have about 6,500 employees and operate as a turbocharger technology systems provider.
Honeywell said the proposed separation will not require a shareholder vote and is expected to be tax-free for its stockholders.
Gary Michel, formerly a senior vice president and president of Ingersoll Rand‘s (NYSE: IR) residential HVAC and supply business, has joined Honeywell to succeed Terrence Hahn as president and CEO of the conglomerate’s home and building technologies strategic business group.
Hahn will report to Adamczyk under his new leadership position and help the conglomerate prepare its homes and global distribution business for the spinoff.
Honeywell will also integrate its smart energy business unit into its performance materials and technologies business’ process solutions division in an effort to expand capabilities and facilitate metering product delivery efforts.