July 23 2026 | Deals | Mergers & Acquisitions | Industrial | EUMI
In industrials, the carve-out is no longer the exception to M&A, it is the base case. Nearly 69% of industrial companies that completed a $5 billion plus acquisition since 2021 also divested a business in the same period, rising above 86% for serial acquirers, reported by PwC's Industrial Manufacturing US Deals 2026 outlook. If you run corporate development in industrials today, you are managing a portfolio, not a single asset.
The conglomerate is unwinding itself
Honeywell is the reference case every banker now points to. In October 2024, CEO Vimal Kapur announced a plan to split the company into three focused businesses. Solstice Advanced Materials spun off first, completing on October 30, 2025, ahead of its original schedule, distributing one Solstice share for every four Honeywell shares held. Honeywell Aerospace followed with its own separation in June 2026. What is left, Honeywell Technologies, now trades as a pure play automation business on the Nasdaq under HON.
Three public companies from one. Three boards, three capital allocation strategies, three growth stories that investors can underwrite independently. That is not a defensive restructuring. It is a recognition that scale without focus was destroying value that a clean separation could unlock.
The numbers behind the trend
This is not one company's story. KPMG's March 2026 analysis of carve-out activity found deal volume accelerating meaningfully from 2023 to 2024, and PwC's industrial products practice puts total US industrial manufacturing deal value at $164.0 billion, driven in large part by an active divestiture pipeline. Michael Fiore, PwC's Industrial Products Deals Leader, frames it plainly: convergence is concentrating value into a narrow set of assets, and the gap between disciplined acquirers and everyone else is only going to sharpen.
Strategic acquirers, not private equity, are driving this. They now account for an estimated 86% of trailing twelve month industrial deal value and 86% of year to date 2026 volume, the highest concentration on record, reported by PwC.
What a carve-out actually looks like in 2026
L3Harris gave the market a clean example in January 2026. It sold a 60% controlling stake in its Space Propulsion and Power Systems business, the unit behind the RL-10 rocket engine, to AE Industrial Partners for $845 million, retaining a 40% stake and a board seat. AE Industrial is reviving the Rocketdyne name for the business, a brand that dates back to 1955. L3Harris gets to refocus capital on core defense priorities. AE Industrial gets a platform with a heritage brand and a clear commercial and civil space growth thesis. Both sides got what they wanted from the same transaction, which is what a well run carve-out is supposed to deliver.
Why this matters for how you run the process
A carve-out is not a smaller version of a full company sale. It is messier. Shared services need to be untangled, standalone financials need to be built often for the first time, and the buyer is underwriting a business that has never operated independently. The information burden on the seller is higher, not lower, than in a standard M&A process, because every assumption about the business needs to be evidenced rather than inherited from the parent's existing reporting.
That is exactly where deals slow down or die: in the gap between what the seller assumes buyers will accept and what buyers actually need to underwrite a standalone entity with confidence. The businesses that move carve-outs to close fastest are the ones that treat the data room as the product from day one, not as a compliance step bolted on at the end.
Divestitures we have seen up close
This is not an abstract thesis for us. Affinity Equity Partners' $2.6 billion acquisition of APM Human Services International from Madison Dearborn Capital Partners, Australia's leading employment and health services provider, ran through the same divestment discipline these processes require, sell-side advised by UBS and Gilbert + Tobin. Wallenius Wilhelmsen's $332.5 million sale of its MIRRAT marine terminal business to Qube Holdings is a smaller but equally clean example of a strategic divesting a non-core asset to a buyer for whom it was a natural bolt-on, sell-side advised by Bank of America and Clayton Utz.
The takeaway
If you are running a diversified industrial business in 2026, the question is not whether you should be reviewing your portfolio for a carve-out. Honeywell, L3Harris, and the broader run of conglomerate simplification already answered that question. The question is whether your next divestiture will be executed with the discipline the market now expects, or whether it will be the one that takes eighteen months longer than it should have.
Prepare your carve-out with a no-cost Ansarada data room
Ansarada is the operating system for every deal, built for the complexity of carve-outs, divestitures, and standalone entity separations across industrials.
Disclaimer: This article reflects publicly available information as of the publication date and the personal analysis and views of the author. References to specific companies, transactions, and figures are drawn from the public sources cited; Ansarada has not independently verified these details beyond what is publicly reported, and does not claim any business relationship with, endorsement by, or involvement in the transactions of the companies named, except where explicitly stated. Nothing in this article constitutes financial, investment, legal, or other professional advice, and should not be relied upon as such. Views expressed are those of the author and do not necessarily represent an official position of Ansarada
