Honeywell's experience may indicate that corporate breakups do not always lead to increased value, which could suggest a need for companies to reevaluate their M&A strategies and focus on organic growth, as the median weighted excess return for investors in large separations was slightly negative from 2000 to 2022.
Conglomerate's Breakup Strategy Fails To Deliver Expected Value
Honeywell’s deal engine has suffered a mechanical failure, with the company’s breakup strategy failing to deliver the expected value. Despite spinning off its specialty chemicals and materials business and acquiring other companies, Honeywell’s value has only increased by $10 billion. The company’s aerospace division is now a separate entity, but its valuation is lower than expected, according to Reuters.
Honeywell's experience may indicate that corporate breakups do not always lead to increased value, which could suggest a need for companies to reevaluate their M&A strategies and focus on organic growth, as the median weighted excess return for investors in large separations was slightly negative from 2000 to 2022.
Conglomerate's Breakup Strategy Fails To Deliver Expected Value
Honeywell’s deal engine has suffered a mechanical failure, with the company’s breakup strategy failing to deliver the expected value. Despite spinning off its specialty chemicals and materials business and acquiring other companies, Honeywell’s value has only increased by $10 billion. The company’s aerospace division is now a separate entity, but its valuation is lower than expected, according to Reuters.