Honeywell's split brings new public company to Phoenix, lauded by economists here

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Honeywell Aerospace will become a separate company with its headquarters still in Phoenix, officials confirmed after details of its parent company's breakup were announced Thursday morning.

Honeywell International Inc. planned to spin off its aerospace and automation technologies, the company said. The industrial conglomerate already had announced it would spin off its advanced materials arm. The moves would create three separate companies.

Honeywell International Inc. has 7,111 employees in Arizona, according to The Arizona Republic’s Republic 100 data of the largest employers in the state, making it the 25th largest employer here.

Honeywell has locations around metro Phoenix and the state, with a heavy emphasis on aerospace. The global headquarters for Honeywell Aerospace is near Sky Harbor International Airport, near 20th Street and Sky Harbor Circle. The company also has facilities in the Deer Valley area, west Phoenix, Glendale, Tempe, Chandler and southern Arizona.

Most of Honeywell Aerospace's sales are in the Americas, according to company documents, with about 23% of sales in Europe, the Middle East and Africa, and 14% in Asia and the Pacific.

Arizona economic development leaders celebrated the move and the company's commitment to remaining in Phoenix.

"Honeywell Aerospace has been a vital industry partner in Arizona for more than 80 years, and we're excited to serve as the launching pad for their next chapter," Sandra Watson, president and CEO of the Arizona Commerce Authority, said in a statement. "We congratulate company leaders and look forward to continuing to work together to advance our already robust aerospace ecosystem."

Phoenix Community and Economic Development Director Chris Mackay said the decision allows the advanced manufacturing ecosystem in Phoenix to "breathe a sigh of relief" knowing the company is keeping Phoenix as its home base.

One of the city's goals is to have the corporate headquarters of publicly traded companies located in the city, Mackay said.

"When the mothership is in your city, when the decisions are being made here, there is so much more connectivity to the community," she said.

Phoenix "brags a lot" about having Honeywell's aerospace division in the city, Mackay said. And "it's huge for us" that the city remains the spinoff company's corporate headquarters.

Aerospace industry jobs have a multiplier effect of between four and five, meaning that for each job in the industry there is a ripple effect of four or five additional jobs created in the market, like induced demand for services and retail, she said.

The company plans to complete the separation by the second half of 2026, and it will be done in a manner that is tax-free to Honeywell shareholders, Vimal Kapur, chairman and CEO announced. Each of the three companies would be publicly listed.

"The formation of three independent, industry-leading companies builds on the powerful foundation we have created, positioning each to pursue tailored growth strategies, and unlock significant value for shareholders and customers," Kapur said in a statement.

"Our simplification of Honeywell has rapidly advanced over the past year, and we will continue to shape our portfolio to create further shareholder value. We have a rich pipeline of strategic bolt-on acquisition targets, and we plan to continue deploying capital to further enhance each business as we prepare them to become leading, independent public companies," he added.

Honeywell Aerospace creates technology used in commercial and defense aircraft, including propulsion, cockpit and navigation systems and auxiliary power systems. According to Honeywell, it had $15 billion in revenue in 2024.

The spinoff could create future job opportunities for employees as the individual companies grow, a company representative said.

"As Aerospace prepares for unprecedented demand in the years ahead across both commercial and defense markets, now is the right time for the business to begin its own journey as a standalone, public company," Kapur said in a statement.

In the company's Thursday morning earnings call, Kapur said the split was following a yearlong review assessing the full separation of the company's largest businesses. During the review, it became clear that the strategy for aerospace was diverting from the rest of the company, so separating would create a better chance to drive growth in each sector from the new spinoff companies.

Separating will better position Honeywell Aerospace to innovate in electrification of aircraft and autonomy of flight, he said during the call. Honeywell will continue with investment in research and development, as well as acquisitions in high-growth areas.

"We will not see any lack of momentum in aerospace investments in the next 18 months ahead," Kapur said.

The move, he said, will make Honeywell Aerospace one of the largest publicly traded aerospace providers. The company has a 100-year heritage as a crucial innovator in aerospace and defense, he said.

(This story was updated to add new information)

Reach the reporter at cvanek@arizonarepublic.com. Follow her on X, formerly Twitter: @CorinaVanek.