Johnson Matthey Reduces Catalyst Technologies Sale Price by Over a Quarter
Specialty chemicals company Johnson Matthey has agreed to significantly cut the sale price of its Catalyst Technologies (CT) division by more than a quarter to £1.33 billion. The firm has also extended the deadline for the unit's acquisition by Honeywell International, reflecting ongoing market pressures and business performance issues.
Revised Deal Terms and Financial Impact
Originally, Johnson Matthey struck a deal in May to sell its CT arm to Honeywell for £1.8 billion, including debts. This agreement would have delivered net proceeds of approximately £1.6 billion to investors. However, the companies have now reduced the price by 26% to £1.33 billion. This adjustment accounts for CT's business performance during the 2025/26 period, which included the deferral of key sustainable solutions licensing projects and reduced profitability from catalyst supply due to a challenging market environment.
As a result of the price cut, Johnson Matthey expects to return around £1 billion in net proceeds to shareholders. This will be achieved through an £800 million special dividend and a £200 million share buyback programme. Following the announcement, shares in Johnson Matthey tumbled by 16% in morning trading on Monday, highlighting investor concerns over the revised terms.
Deadline Extension and Regulatory Concerns
The firms have pushed back the deadline for meeting approvals and closing conditions from February 21 to July 21, with an option to further extend to August 21. Expectations are now set for the sale to complete by the end of August. This extension follows weekend reports that Honeywell was considering walking away from the deal due to worries over regulatory approvals and business milestones.
The sale of CT, which designs and produces catalysts for the chemicals and energy industries, had previously driven Johnson Matthey's shares to surge by nearly 60% over the past year before Monday's announcement. This strategic move is part of Johnson Matthey's broader efforts to turn around its business by focusing on clean air technologies and platinum group metal chemicals.
Market Reactions and Future OutlookThe price reduction and deadline extension underscore the volatile market conditions affecting the specialty chemicals sector. Analysts suggest that the deferral of key projects and reduced profitability have necessitated these adjustments, potentially impacting both companies' financial strategies moving forward. Stakeholders will be closely monitoring the completion of the deal and its implications for Johnson Matthey's restructuring plans.
