(Reuters) - Honeywell International Inc (HON.N), a U.S. manufacturer of aerospace parts and climate control systems, said it would spin off its $1.3 billion resins and chemicals operations into a standalone company, as it focuses on higher-growth businesses.
The new company, to be named AdvanSix Inc, will be spun off by early 2017, Honeywell said on Thursday.
The resins and chemicals business is part of Honeywell’s advanced materials division, whose sales fell 10 percent to $3.51 billion in 2015.
Sales of resins and chemicals fluctuate with the market price of certain raw materials that are exposed to the rise or fall in oil prices.
The decision to spin off the business comes two months after Honeywell scrapped its $90.7 billion offer to buy rival United Technologies Corp (UTX.N), citing the latter’s unwillingness to engage in talks.
Honeywell has been focusing on higher-margin businesses such as its aerospace division, its biggest, which makes aircraft engines and parts.
The new company would be a leading producer of a polymer resin used to make engineered plastics, fibers and filaments used in automotive and electronic components, and food and industrial packaging, Honeywell said.
The spun-off company will also make ammonium sulfate fertilizers and chemical intermediates, including phenol and acetone.
Erin Kane, vice president of the resins and chemicals business, will be chief executive of the new company.
Honeywell said it was maintaining its 2016 financial guidance for now.
The company’s shares were up slightly at $114.39 in early trading. Up to Wednesday’s close, the stock had risen about 10 percent this year.
Reporting by Ankit Ajmera in Bengaluru; Editing by Maju Samuel