Honeywell cuts price for Johnson Matthey Catalyst unit to salvage deal

Honeywell International (NASDAQ:HON) has reached a last-minute agreement to slash the price of its acquisition of Johnson Matthey’s Catalyst Technologies business, moving to rescue the transaction after considering walking away.

The industrial conglomerate will now pay £1.325 billion ($1.79 billion) for the unit, a 26% reduction from the original £1.8 billion price tag agreed upon in May 2025.

The revised terms reflect a "challenging market environment" and a dip in the unit's profitability during the 2025/26 fiscal year, characterized by the deferral of several key sustainable solutions projects.

To accommodate the remaining antitrust hurdles, the companies extended the deal's "long stop" date to July 21, 2026, with a further buffer to August 21, 2026, if specific regulatory conditions remain outstanding.

Despite the lower valuation, Honeywell expects the acquisition to be accretive to its adjusted earnings per share within the first full year of ownership.

The deal remains a cornerstone of CEO Vimal Kapur’s strategy to pivot the company toward "megatrends" like the energy transition and automation.

For Johnson Matthey, the sale is a vital part of its restructuring plan, though the lower proceeds mean the British chemicals firm will now return roughly £1 billion to shareholders—comprising an £800 million special dividend and a £200 million buyback—down from an initial estimate of £1.4 billion.