The Conglomerate Model Works Very Well – Until It Doesn't
Honeywell is the latest conglomerate to break up. But for all the bashing of the model, the general idea — namely stability through diversification — still persists.
Honeywell will split its aerospace and automation businesses into two separate companies and is also spinning off its advanced materials arm.
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Honeywell International Inc. this week announced plans to separate its aerospace and automation businesses, the biggest step yet to unravel its sprawling conglomerate structure. The move, announced amid pressure from activist investor Elliott Investment Management, in some ways felt inevitable after a wave of breakups at Honeywell’s closest peers. But the unscrambling of yet another titan of American industry also raises fresh questions about investors’ appetite for business variety under one roof and what exactly it means to be a conglomerate these days.