Johnson Matthey Sells Hydrogen Venture in £1.8BN Deal with Honeywell
United Kingdom, Tuesday, 27 May 2025.
Johnson Matthey hands its blue hydrogen business to Honeywell for £1.8 billion, aiming to soothe shareholders. This move reshapes market dynamics and promises large returns, keeping us on our toes!
Strategic Move: Johnson Matthey’s Divestment
In a shrewd move, Johnson Matthey is selling its blue hydrogen business to Honeywell for £1.8 billion. The sale is structured on a cash and debt-free basis, expected to yield net proceeds of roughly £1.6 billion for Johnson Matthey after customary closing adjustments [1][5]. This decision seems to align with the company’s goal to placate activist shareholders and reposition itself more strategically towards its core business areas [1].
Market Impacts and Financial Dynamics
The transaction reflects a strategic refocus for Johnson Matthey towards cleaner initiatives like Clean Air and Precious Metal Services (PGMS). The company plans to redistribute around £1.4 billion, about 88% of the net sale proceeds, to shareholders [1]. With £200 million reserved for corporate purposes, they aim to achieve a growth rate in group operating profits and expect to generate at least £250 million in free cash flow by FY2027/28 [1][3].
Honeywell’s Strategic Expansion
Honeywell’s acquisition aligns with its strategy to enhance its Energy and Sustainability Solutions (ESS) portfolio, aiming to strengthen its role in supplying lower-emission fuels, including blue hydrogen [2][4]. The imminent addition of Johnson Matthey’s catalyst technologies supports Honeywell’s mission to provide integrated energy solutions and capture a more significant market share in the green tech space [2].
Closing and Future Outlook
The acquisition, announced on 24 May 2025, aims to close by the first half of 2026, pending regulatory approvals. This move not only reshapes the market possibilities for hydrogen but provides Honeywell with a pivotal role in the sustainable fuel industry. Johnson Matthey anticipates that these strategic moves will bolster their cash generation capacity and shareholder returns significantly [1][4].