Acquisition terms revised amid weak demand
Honeywell International has negotiated a significant reduction in the price of its planned acquisition of Johnson Matthey’s catalyst technologies unit, highlighting the ongoing strain across the global chemicals sector.
Johnson Matthey confirmed it will sell the business for £1.325 billion, down from the previously agreed £1.8 billion. The revised valuation reflects weaker recent performance, including delays in sustainable technology licensing projects and broader softness in market conditions. Honeywell has also been granted additional time to finalize the transaction.
Chemicals sector pressure intensifies
The renegotiation follows other signals of stress within the industry. LyondellBasell recently halved its dividend, citing similar headwinds tied to demand weakness and margin compression. Together, the developments underscore a challenging environment for companies exposed to refining, petrochemicals, and industrial processing.
Johnson Matthey’s catalyst technology division operates in areas that have faced slower capital investment, particularly in sustainability-linked projects where customers have deferred spending decisions.
Strategic fit for Honeywell
For Honeywell, the acquisition remains strategically aligned despite the lower price. The company already operates in catalyst and process technologies and sees the transaction as an opportunity to strengthen its position with refining and petrochemical clients.
The deal also supports Honeywell’s push into lower-emission fuel production, including sustainable aviation fuel, where integrated processing solutions are gaining importance amid regulatory and decarbonization pressures. Expanding its capabilities in this segment could help Honeywell offer end-to-end solutions rather than component technologies.
Capital plans adjusted and market reaction
Johnson Matthey responded to the revised transaction terms by reducing its capital-return commitment to £1 billion from a previously outlined £1.4 billion. The change reflects the lower proceeds from the sale.
In market trading, Johnson Matthey shares fell sharply in London, dropping roughly 15%. Honeywell shares were little changed in premarket trading in the United States.
Analysts at Jefferies noted that although the revised sale price is not ideal for Johnson Matthey shareholders, it is still more favorable than the possibility that Honeywell might have walked away from the agreement altogether.
