How the U.S. industrial heavyweight is using an all‑cash deal to accelerate its low‑carbon chemical solutions—and why Johnson Matthey is slimming down

Deal overview

Honeywell stunned London’s City on 22 May 2025 with a binding agreement to buy Johnson Matthey’s Catalyst Technologies business for 1.8 billion pounds in cash, equal to roughly 2.3 billion dollars. Honeywell will fold the acquired assets, which include the Davy Process Technologies and Tracerco catalyst lines, into its UOP energy‑transition portfolio. The price implies an enterprise value of about eleven times the unit’s projected 2025 earnings before interest, tax, depreciation and amortisation, including estimated cost synergies and tax benefits.

Strategic logic for Honeywell

Chief executive Vimal Kapur described the move as “a fast‑track to full‑spectrum solutions for lower‑carbon chemicals.” Catalyst Technologies holds over 400 patents and licences more than two thousand reactors worldwide for producing methanol, ammonia, sustainable aviation fuel and blue hydrogen. Pairing those licences with Honeywell’s modular hydrogen and SAF plants creates an end‑to‑end offering that rivals Topsoe and Linde Engineering. Analysts at Bank of America calculate that cross‑selling could lift Honeywell UOP’s annual revenue by 600 million dollars within five years.

Why Johnson Matthey decided to sell

For Johnson Matthey chief executive Liam Condon the divestiture is a bet on focus. The British specialty‑chemicals group has faced pressure from activist investor Standard Investments after a string of profit warnings and a retreat from battery cathode materials. Condon will return 1.4 billion pounds of the sale proceeds to shareholders via buy‑backs while using the rest to pay down debt and invest in the company’s Clean Air emissions‑control unit and hydrogen fuel‑cell membrane platform. Shares in Johnson Matthey jumped eight percent on the news.

Financing details

Honeywell will fund the purchase with existing cash and a short‑term bridge facility underwritten by Citi and BNP Paribas. Management says net debt to EBITDA will rise to 1.8 times—well below the three‑times ceiling that would threaten Honeywell’s A credit ratings. The deal is expected to close in early 2026 pending U.K. national‑security clearance and antitrust reviews in the United States and European Union.

Market reaction

Equity investors applauded the strategic fit, sending Honeywell stock up 3.2 percent in New York. In debt markets, Honeywell’s five‑year credit default swaps widened modestly by three basis points, reflecting the additional leverage. In London, Johnson Matthey rose as much as nine percent before settling up six percent as traders welcomed a cleaner corporate narrative.

What changes for customers

Existing licencees—ranging from Chinese methanol producers to Saudi blue‑ammonia developers—will continue to receive technical support from the Davy and Tracerco engineering teams, who will transfer to Honeywell. Over time, Honeywell plans to offer bundled packages that combine reactor design, advanced catalysts and digital optimisation software, promising up to ten percent energy savings per metric ton of product.

Energy‑transition context

The deal lands amid a scramble to commercialise low‑emission fuels. Governments are rolling out subsidies for sustainable aviation fuel, while Europe’s Net‑Zero Industry Act aims to onshore clean‑tech manufacturing. Honeywell says the acquisition positions it to capture “double‑digit” share of the nascent blue‑ammonia market, projected to exceed 90 million tonnes per year by 2040 according to the IEA.

Risks and hurdles

Regulators will scrutinise the control of key ammonia and methanol patents, and environmental groups fear the deal could lock in natural‑gas‑ based blue hydrogen rather than green hydrogen. Honeywell insists carbon‑capture integration will make the processes Paris‑aligned, but the company has yet to publish a full lifecycle study. Another risk is talent retention: about nine hundred Johnson Matthey engineers will switch employers, and competition for process‑chemistry talent is fierce.

Looking forward

If approved, the acquisition will expand Honeywell’s footprint in the U.K., where it already employs three thousand people across aerospace and automation units. Integration teams have been dispatched to JM’s Billingham R&D campus to map IT and supply‑chain overlaps. Investors can expect an update on synergy targets at Honeywell’s Capital Markets Day in November 2025.

Conclusion

Honeywell’s 1.8 billion‑pound swoop for Johnson Matthey’s Catalyst Technologies division is more than a balance‑sheet exercise; it is a strategic wager on the chemicals of the energy‑transition era. For Honeywell the prize is a deeper portfolio and stronger licensing platform; for Johnson Matthey it is a chance to simplify and reward shareholders. For the wider market, the deal underscores how rapidly the green‑chemistry value chain is consolidating on both sides of the Atlantic.

Sources

Honeywell press release, 22 May 2025

Financial Times, Honeywell buys Johnson Matthey catalyst unit in £1.8bn deal, 22 May 2025

Nasdaq News, Honeywell to acquire Johnson Matthey’s Catalyst Technologies, 22 May 2025

The Times, Johnson Matthey sells catalyst business to Honeywell, 22 May 2025