Honeywell International Inc ( HON ) shares are popping in early trading Tuesday after activist investor Elliott Investment Management announced it built a stake in the company and is pushing for changes.

What Happened: Elliott Investment Management sent a letter to Honeywell’s board on Tuesday disclosing that it has built an investment of more than $5 billion in Honeywell ( HON ) as it believes the industrials giant would be better served by separating into two companies.

“The conglomerate structure that once suited Honeywell ( HON ) no longer does, and the time has come to embrace simplification,” the activist said in its letter to the board.

Elliott is pushing Honeywell ( HON ) to consider a separation of its Aerospace and Automation businesses as it believes the units would benefit from simplified strategies, focused management and improved capital allocation as independent entities. The activist believes a separation could result in share price gains of 51% to 75% over the next two years.

“While shareholders have long hoped for a separation, the current environment presents a distinctly attractive opportunity to do so. We are of course aware that Honeywell ( HON ) has considered the idea of simplification in the past. However, what makes the current situation different is the sheer amount of value that Honeywell ( HON ) can create by pursuing simplification now,” Elliott said.

Elliott believes both businesses would be valued at more than $100 billion on their own. Honeywelll had a market cap of approximately $146 billion as of Monday’s close, according to Benzinga Pro. The firm’s bear case for Honeywell ( HON ) after potential separation is $330 by the end of 2026, while the bull case for potential separation is $383 by the end of 2026.

“This level of value creation would be profound for any company, let alone one of Honeywell’s size. However, history would indicate that these assumptions might ultimately prove too conservative,” the activist said.

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HON Price Action: Honeywell ( HON ) shares were up 6.11% at $239.01 at the time of publication, according to Benzinga Pro.