Specialty chemicals company Johnson Matthey has agreed to significantly reduce the sale price of its Catalyst Technologies (CT) business by more than a quarter, lowering it to £1.33 billion. The firm has also extended the deadline for the unit's acquisition by Honeywell International, marking a substantial revision to the original deal terms.
Revised Deal Terms and Financial Implications
Johnson Matthey initially struck an agreement in May to sell its CT arm to Honeywell for £1.8 billion, which included debts. This original arrangement was projected to deliver net proceeds of approximately £1.6 billion to investors. However, the revised price of £1.33 billion represents a sharp 26% reduction from the initial figure.
The companies have mutually decided to extend the deadline for completing the transaction. They cited CT's business performance during the 2025/26 period as the primary reason for the price adjustment. This performance includes the deferral of key sustainable solutions licensing projects and reduced profitability from catalyst supply due to a challenging market environment.
Shareholder Returns and Strategic Focus
Following the price cut, Johnson Matthey now anticipates returning around £1 billion in net proceeds from the deal to shareholders. This will be achieved through an £800 million special dividend and a £200 million share buyback programme. The sale of CT, which designs and produces catalysts for the chemicals and energy industries, has already positively impacted Johnson Matthey's share price, with the stock surging nearly 60% over the past year since the deal was announced.
The divestiture is a key component of Johnson Matthey's broader strategic efforts to transform its business. The company is focusing its resources on core areas such as clean air technologies and platinum group metal chemicals, aiming to streamline operations and enhance profitability in these segments.
Extended Timeline and Market Reactions
The firms have pushed back the deadline for meeting approvals and closing conditions from February 21 to July 21. Additionally, there is an option to further extend this deadline to August 21, with expectations that the sale will be finalised by the end of August. This extension follows weekend reports indicating that Honeywell was considering withdrawing from the deal due to concerns over regulatory approvals and business milestones.
The revised agreement reflects the ongoing adjustments both companies are making in response to market dynamics and operational challenges. The Catalyst Technologies division remains a significant asset, and its sale is closely watched by investors and industry analysts alike.
