Honeywell Amends Deal for Johnson Matthey's Catalyst Unit
Honeywell has entered into an amended agreement to acquire Johnson Matthey’s Catalyst Technologies business. The transaction is a strategic carve-out, allowing Honeywell to acquire a non-core asset to accelerate growth in a specific industrial vertical. The amendment suggests a change in the original terms of the deal, though specifics were not detailed.
- The acquisition price was cut by 26%, from an initial £1.8 billion to £1.325 billion. Johnson Matthey attributed the price adjustment to the unit's recent performance, which included deferred sustainable solutions licensing projects and lower-than-expected profitability in catalyst supply. - The original deal, announced in May 2025, valued the catalyst unit at approximately 11 times its projected 2025 EBITDA. The initial enterprise value of £1.8 billion was also stated to be 13.3 times the adjusted EBITDA of £136 million for the 2024/2025 fiscal year. - Following the announcement of the revised, lower-priced deal, shares of Johnson Matthey fell by as much as 17%, the largest drop since 2021. - For Honeywell, the acquisition is a strategic move to broaden the installed base for its UOP business, which provides process technology and catalysts to the refining, petrochemical, and renewable fuels industries. The deal is projected to be accretive to Honeywell's adjusted earnings per share within the first full year after closing. - The sale is part of a larger strategic overhaul by Johnson Matthey to streamline its operations into a more focused and cash-generative company. The company has reclassified the Catalyst Technologies unit as a "discontinued operation" in its financial reporting. - As a result of the lower sale price, Johnson Matthey reduced its planned capital return to shareholders from the initial £1.4 billion to approximately £1.0 billion. The return will be executed via an £800 million special dividend with a share consolidation and a £200 million share buyback program. - The deadline to finalize the transaction, known as the "long stop date," has been extended to July 21, 2026, with a potential further extension to August 21, 2026, to allow more time for regulatory approvals. The deal is now anticipated to be completed by the end of August 2026.
