Honeywell (HON) Stock Up 4% on Spin-Off Approval as Cramer Backs the Breakup

TLDR

• Honeywell’s board gave final approval for the spin-off of its aerospace business, set for June 29
• HON stock rose about 4% Monday morning on the news
• Shareholders of record as of June 15 will receive one HONA share for every two HON shares held
• After the split, the remaining company will be renamed Honeywell Technologies and keep the HON ticker on Nasdaq
• A 1-for-2 reverse stock split of Honeywell Technologies will take effect immediately after the separation

Honeywell International (HON) got the green light from its board on Monday for the spin-off of its aerospace division, with the separation now locked in for June 29.

Honeywell International Inc., HON

HON stock climbed around 4% in Monday morning trading after the announcement. The move also got a lift from a broader market rally following news of a U.S.-Iran peace deal.

The board formally approved the distribution of Honeywell Aerospace (HONA) stock to existing shareholders. It’s a key milestone in a restructuring plan the company first outlined earlier this year.

Once the split is done, the remaining business will be renamed Honeywell Technologies and continue trading on Nasdaq under the HON ticker. The standalone aerospace company, HONA, will focus on commercial aviation, defense, and space markets.

Shareholders on record as of June 15 will receive one share of Honeywell Aerospace for every two Honeywell shares they own. The distribution is set for 12:01 a.m. New York time on June 29.

Honeywell Aerospace stock is expected to begin trading on a when-issued basis under the ticker HONAV around June 15. Regular trading under HONA kicks off June 29.

Two Markets, One Stock

During the lead-up to the separation, HON will trade in two separate markets. Stock trading under the HON ticker will carry the right to receive HONA stock. Stock trading under the temporary ticker HONIV will not.

CEO Vimal Kapur called the board approval another step in the company’s portfolio transformation, which has involved a string of acquisitions and divestitures in recent years.

Honeywell also confirmed that a 1-for-2 reverse stock split of Honeywell Technologies will take effect right after the spin-off, with a matching reduction in authorized share count. The reverse split only happens if the separation goes through.

What Jim Cramer Said

CNBC’s Jim Cramer has been vocal about his enthusiasm for the deal. His Charitable Trust holds a position in HON, and he’s said he wants to go bigger.

The SEC declared Honeywell Aerospace’s Form 10 registration statement effective on June 11, clearing the regulatory path for the transaction.

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