By Svea Herbst-Bayliss

(Reuters) -Activist investor Elliott Investment Management said Honeywell (NASDAQ:) can also fair composed rupture up into two separate businesses on Tuesday, following within the footsteps of diverse industrial conglomerates that possess broken up currently.

Elliott said in a letter that it had constructed a stake price bigger than $5 billion in Honeywell, certainly one of its most tasty ever, and that administration can also fair composed rupture up the company into two standalone businesses targeted on aerospace and automation. Shares had been up 3% on Tuesday, shedding some earlier good points.

“Over the remaining five years, uneven execution, inconsistent monetary results and an underperforming fraction designate possess diminished its safe file of designate creation,” Elliott said, while composed praising the company’s products and technology.

All around the last five years, Honeywell’s stock has won 28%, when put next with a 94% expand within the good-market index.

The Charlotte, North Carolina-headquartered company has been on a dealmaking spree since CEO Vimal Kapur took the helm remaining twelve months. He has sought to shift the company’s focal level to so-referred to as megatrends of automation, the future of aviation and vitality transition, and Honeywell has been promoting property that form not align with these traits.

But Elliott said Honeywell, an “iconic pillar” of American industry, would make the most of a simplified structure, equivalent to breakups of diverse industrial giants equivalent to United Technologies (NYSE:), GE and Ingersoll Rand (NYSE:).

A separation can also create two sector leaders that could perhaps presumably presumably also compose better and profit customers, workers and shareholders, Elliott said. The company has requested a gathering with the company, as nicely.

Elliott predicted a separation can also push up the fraction designate by 51% to 75% within the following two years, it said in its letter to Honeywell’s board.

Honeywell said it appears to be like to be to be like forward to participating with the company even though it had no prior knowledge of the investment.

Closing month, the company presented plans to walk off its improved materials unit into a publicly traded company. One at a time, it also said it modified into taking a explore to divest its private protective tools industry.

Elliott told the company that after conserving apart Aerospace, Honeywell Automation would be a stronger and better-flee industry valued at roughly $100 billion.

Elliott invests roughly $70 billion in property and is certainly one of many busiest and most extremely efficient activist investors, having only within the near previous pushed for adjustments at Southwest Airlines (NYSE:) and low chain Starbucks (NASDAQ:).

Elliott said its behold of business company shareholders presentations a majority imagine pure-play industrials compose better than diverse conglomerates.