Dive Brief:

• Honeywell finalized the spinoff of its Solstice Advanced Materials business Thursday as part of its plan to split into three companies.
• Solstice manufactures refrigerants, building solutions and chemicals for end markets such as HVAC systems, automotive, alternative energy, construction and semiconductors. In 2024, Solstice grew 4.4%,  generated $3.8 billion in net sales and had nearly 4,000 employees globally.
• Refrigerants and applied solutions make up 72% of its net sales, while electronic and specialty materials account for the remaining 28%. Refrigerants, like R-454B used in HVAC systems, contributed $1.3 billion in sales last year. The refrigerants are in high demand due to data center cooling needs and growing numbers of electric vehicles.

Dive Insight:

Honeywell has been working to simplify its portfolio and reorganize its business into multiple “pure-play” companies with focused strategies and more flexibility — a goal CEO Vimal Kapur reiterated during the company’s Q3 earnings call last week.

“With this realignment … Honeywell will be a premier pure-play automation company,“ he said.

Honeywell announced plans last October to spin off Solstice, focused on specialty materials, into an independent publicly traded company. While the initial goal was to complete the separation by early 2026, the spinoff was finalized ahead of schedule. Honeywell’s board of directors formally approved the spinoff this month.

“The teams have worked really, really hard to get it done ahead of time,” Kapur said.

Solstice began trading on the stock market Thursday morning under the ticket symbol SOLS, with CEO David Sewell ringing the opening bell. Sewell has been at Honeywell for less than a year, but he brings more than three decades of industry experience at companies such as WestRock, Sherwin-Williams and GE Plastics.

The goal of the spinoff is “to unleash the full growth potential of Solstice,” according to Solstice’s investor day presentation earlier this month. Operating independently will enable the company to refine its operating model and allocate capital based on its priorities, according to the presentation.

Ahead of the spinoff, Honeywell grew sales 6% year over year to $10.4 billion in Q3 2025. The Solstice spinoff is expected to reduce Honeywell’s full-year sales by $700 million year over year, according to the manufacturer’s Q3 earnings release last week. It will also reduce free cash flow by $200 million. Honeywell projects 2025 net sales in the range of $40.7 billion to $40.9 billion, down from previous guidance of $40.8 billion to $41.3 billion.

Following Solstice, Honeywell will also spin off its Aerospace Technologies division, which is expected to occur in the second half of 2026.

“We will carry the learnings and momentum from Solstice to next year's separation of Aerospace,” Kapur said on the earnings call.

The manufacturer has made other portfolio moves in recent years, such as the sale of its personal protective equipment business for $1.3 billion last year and the $2.16 billion acquisition of heat pump maker Sundyne in June.