In a concerted effort to align its portfolio around "Great
Positions in Good Industries" and leverage on technological
synergies, diversified conglomerate
Honeywell International Inc.
) recently restructured its operating segments. These included the
divestiture of Friction Materials business and the merger of
Transportation Systems segment with Aerospace business segment
effective third-quarter 2014.
Honeywell sold its Friction Materials business to
Federal-Mogul Holdings Corp.
), a global manufacturer and supplier of powertrain components and
vehicle safety products, for approximately $155 million in cash.
The asset sale is part of the Honeywell's long-term strategy to
realign its portfolio with a strong focus on core differentiated
technologies and divest those which no longer fit its corporate
Headquartered in Germany, the Friction Materials business has
significant operations in Romania and China. This global supplier
of automotive brake friction materials and aftermarket brake
products offers disc brake pads, drum brake linings and a variety
of aftermarket brake products under the Bendix and JURID brand
names. These products are primarily used in passenger cars, light
trucks, commercial vehicles, aircraft and railway, and other
Under the terms of the agreement, Federal-Mogul acquired the
Friction Materials business that operates only in Europe, China and
Brazil and not in the U.S. In addition, the transaction did not
include the Bendix line of products and the joint ventures that
operate in Australia, Thailand and Malaysia. Honeywell will
continue to own the non-operating sites in Conde, France and
Honeywell also decided to reorganize its operating segments by
merging Transportation Systems segment with the Aerospace segment
to leverage on the shared business models and the engineering and
technology similarities. The automotive turbocharger business,
which has originated from the Aerospace business and currently is
an integral part of the Transportation segment, is one of the
high-margin propositions for Honeywell.
By combining the two businesses, Honeywell expects to benefit
from an expanded sharing of the technical expertise for an enriched
portfolio of differentiated products in the respective markets.
Effective third-quarter 2014, the three business segments of the
company will be: Aerospace, Automation and Control Solutions,
and Performance Materials and Technologies. The overall financial
performance of the company will include Transportation Systems
within Aerospace segment and will have no material impact on the
historical consolidated financial position, results of operations,
or cash flows.
Honeywell currently has a Zacks Rank #3 (Hold). Some better-ranked
stocks in the industry include
United Technologies Corp.
), both of which carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
HONEYWELL INTL (HON): Free Stock Analysis
UTD TECHS CORP (UTX): Free Stock Analysis
CLARCOR INC (CLC): Free Stock Analysis Report
FEDERAL MOGUL-A (FDML): Free Stock Analysis
To read this article on Zacks.com click here.