Johnson Matthey soars on $2.4 billion unit sale to Honeywell

By Yamini Kalia and Yadarisa Shabong

(Reuters) -UK chemicals company Johnson Matthey has agreed to sell its catalyst technologies business to Honeywell International for 1.8 billion pounds ($2.4 billion), including debt, it said on Thursday, driving its shares up by a third.

The British company's catalyst technologies, which designs and manufactures catalysts used in the production of sustainable aviation fuel, fertilisers and paints, was valued at 945 million pounds, on average, by sell-side analysts.

JPMorgan said it had valued the business at 1.05 billion pounds.

Johnson Matthey CEO Liam Condon told analysts the company had received interest for the unit three years ago but at a valuation that was "minuscule compared with today".

The sale to Honeywell is expected to generate net proceeds for the British company of about 1.6 billion pounds, around 88% of which will be returned to shareholders, Johnson Matthey said.

Its shares on Thursday gained more than 30% to touch a one-year high. In April, they had traded at levels last seen in 2009.

Johnson Matthey will now focus on its two main businesses that make pollution filters for cars and process platinum group metals.

"We will now fundamentally re-shape Johnson Matthey into a more focused and leaner business," Condon said in a statement on Thursday.

Over the last four-and-a-half years, Johnson Matthey has sold assets including battery materials, glass technologies, health and medical devices.

When Condon took office in March 2022, investors and analysts expected him to break up the company.

Profit and revenue misses over the last year, however, led to pressure from activist shareholder, Standard Investments, which urged a strategic review and a board overhaul.

Catalyst Technologies joins a growing list of British assets being sold to American companies. In January, American Axle & Manufacturing bought GKN automotive owner Dowlais, while DoorDash acquired British food delivery service Deliveroo this month.

Johnson Matthey reported the divestment alongside its annual results when its underlying operating profit slightly exceeded analysts expectations for the year.

Catalyst Technologies made up about 19% of Johnson Matthey's total sales in the year ended March 2025.

It will be folded into Honeywell's Energy and Sustainability Solutions business.

($1 = 0.7447 pounds)

(Reporting by Yamini Kalia and Yadarisa Shabong in Bengaluru; Editing by Mrigank Dhaniwala, Sherry Jacob-Phillips and Barbara Lewis)