(Reuters) -Honeywell said on Tuesday it would spin off its advanced materials business, which makes products used in everything from bullet-resistant armor to pharmaceutical packaging, into an independent, publicly traded company in the U.S.
Shares of the diversified manufacturer were up 2.8% in premarket trading.
Honeywell's new CEO Vimal Kapur has been streamlining the company's portfolio over the past few years to shift focus toward its aviation, automation and energy segments.
The advanced materials business accounted for 10% of Honeywell's total sales of $36.66 billion last year.
Honeywell expects the business, which includes brands such as Solstice and Hydranal, to generate between $3.7 billion and $3.9 billion in revenue for FY24.
The planned spin-off is expected to be completed by the end of next year or early 2026 and would not impact the company's overall outlook, it said.
Honeywell, which has a market capitalization of about $132 billion, supplies products, software and services to various sectors, including construction, aerospace and industrial applications.
Goldman Sachs is the financial adviser to Honeywell.
(Reporting by Nathan Gomes and Aatreyee Dasgupta in Bengaluru; Editing by Mrigank Dhaniwala and Shilpi Majumdar)