Resideo agrees to terminate indemnification agreement with Honeywell

SCOTTSDALE, Ariz.—Resideo Technologies announced that it has entered into a definitive agreement with Honeywell International to accelerate and eliminate all future monetary obligations under the indemnification and reimbursement agreement the companies entered into in 2018 in connection with Resideo's spin-off from Honeywell.

Under the terms of the agreement, Resideo will accelerate all potential indemnification and reimbursement obligations and make a one-time cash payment of $1.59 billion to Honeywell in the third quarter of 2025.

In addition, Resideo made its regularly scheduled third quarter payment under the indemnification agreement of $35 million on July 29, 2025. Upon the closing of the transactions contemplated by the agreement, the indemnification agreement will terminate, resulting in the elimination of Resideo's obligation to make annual payments to Honeywell of up to $140 million through year-end 2043 and the elimination of all affirmative and negative covenants contained in the indemnification agreement.

The termination of the indemnification agreement is expected to be immediately accretive to Resideo's adjusted earnings per share and free cash flow.

"This agreement with Honeywell marks a significant turning point for Resideo and exemplifies the constructive relationship we have forged with Honeywell,” said Jay Geldmacher, Resideo president and CEO. “With the closing of this agreement, we expect to significantly enhance our strategic and financial flexibility while also providing simplicity and clarity for our investors. We believe our future annual profitability and free cash flow generation will be improved, and Resideo now has the ability to pursue the value-creating opportunity provided by separating ADI and Products & Solutions.”

On July 30, Resideo announced its intention to separate its ADI Global Distribution business (ADI) through a tax-free spin-off to Resideo shareholders. Following the completion of the separation, expected to be completed in the second half of 2026, Resideo's Products & Solutions business (P&S) will continue to operate as Resideo, and ADI will become an independent public company.

Resideo intends to finance the payment to Honeywell through a combination of approximately $400 million of cash-on-hand and new senior secured debt financing that has been committed by J.P. Morgan and Wells Fargo.

Resideo's other agreements with Honeywell, including its long-term license to use the Honeywell Home brand, will remain in effect.