Activist investor Elliott Investment Management has acquired a significant holding of over $5 billion in Honeywell International and is urging the company to divide into two distinct entities.

In correspondence directed at Honeywell’s board, Elliott emphasized the necessity for the Charlotte, North Carolina-based company to streamline its organizational structure. They pointed to ongoing challenges such as inconsistent execution, fluctuating financial performance, and a lackluster stock price.

Elliott posits that Honeywell should separate its aerospace division from its automation business. They argue that if these segments function as independent companies, they could enjoy clearer strategies, concentrated management efforts, improved resource allocation, heightened operational efficiency, better oversight, and other advantages associated with the transition away from conglomerate structures that have benefitted various large firms, including former conglomerates like General Electric and United Technologies.

The investor group believes that a split of the aerospace and automation divisions could lead to significant increases in share prices, potentially ranging from 51% to 75% within the next two years.

In response, Stacey Jones, Honeywell’s Chief Communicator, acknowledged the various viewpoints of shareholders, stating, “Honeywell’s board of directors and management acknowledge and appreciate the perspectives of all our shareholders. Although Elliott had not made us aware of their views prior to today, we look forward to engaging with the firm to obtain their input. Our leadership welcomes investor feedback as we continue to execute a disciplined strategy, which includes pursuing sustainable growth, optimizing the portfolio, and maintaining an accretive capital deployment program.”

Following this news, Honeywell’s shares saw a 7% increase in value before the market opened on Tuesday.