Johnson Matthey shares fell 15% after Honeywell reduced the Catalyst Technologies deal price
The deal value was cut from £1.8 billion to £1.33 billion
Shareholder returns were reduced to approximately £1 billion from £1.4 billion
The companies extended antitrust approval deadlines to July 21, 2026
📖 Full Retelling
British speciality chemicals maker Johnson Matthey Plc announced on Monday that its shares had plummeted 15% after Honeywell International Inc. agreed to reduce the purchase price of its Catalyst Technologies business to £1.33 billion, down from the £1.8 billion originally agreed upon in May 2025, citing challenging market conditions and deferred sustainable solutions projects. The revised deal, announced in a regulatory filing to the London Stock Exchange, reduces the planned shareholder return to approximately £1 billion from £1.4 billion, comprising an £800 million special dividend and a £200 million on-market share buyback alongside a share consolidation. The two companies also extended the long-stop date for satisfying antitrust approval conditions to July 21, from Feb. 21, with a further extension to Aug. 21 available if certain conditions are met. Johnson Matthey explained that the price reduction reflected the business performance of Catalyst Technologies, including the deferral of key sustainable solutions licensing projects and weaker demand for catalysts due to what it described as 'the challenging market environment.' Despite the reduced deal value, the company maintained its fiscal 2025-26 guidance, projecting underlying operating profit growth 'at the higher end of a mid single digit percentage range' and free cash flow 'materially higher than last year' on a pro forma basis excluding the Catalyst Technologies business. Jefferies analysts noted that the revised consideration 'remains more favourable than weekend reports suggesting Honeywell was considering terminating the deal,' and highlighted that the £1.33 billion figure 'still compares favourably' against their sum-of-the-parts valuation of £700 million for the business prior to the transaction being announced.
🏷️ Themes
Corporate deals, Market performance, Chemical industry
Honeywell International Inc. is an American publicly traded, multinational conglomerate corporation headquartered in Charlotte, North Carolina. It primarily operates in four areas of business: aerospace, building automation, industrial automation, and energy and sustainability solutions (ESS).
British multinational chemicals and sustainable technologies company
Johnson Matthey plc is a British multinational speciality chemicals and sustainable technologies company headquartered in London, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
The Catalyst Technologies Venture Capital Group was one of the first technology company incubators. It was founded in 1981 in Sunnyvale, California by Atari co-founder Nolan Bushnell and received much assistance from fellow Atari luminary, Al Alcorn. The term Catalyst Group may refer to both the com...
The 15% share price drop reflects investor disappointment over reduced shareholder returns due to Honeywell trimming its acquisition price for Johnson Matthey's Catalyst Technologies business by over £470 million. This revision signals challenges in the specialty chemicals sector, including deferred sustainable projects and weaker catalyst demand. The deal's survival, albeit at a lower price, prevents a worse outcome of potential termination, preserving strategic value for both companies.
Context & Background
Honeywell reduced the acquisition price for Johnson Matthey's Catalyst Technologies unit from £1.8 billion to £1.33 billion.
The deal's long-stop date for antitrust approval was extended to July 21, 2026, with an option to extend further to August 21.
Johnson Matthey cited a challenging market environment, including deferred licensing projects and weaker catalyst demand, as reasons for the price cut.
The company reaffirmed its fiscal 2025-26 profit growth and cash flow targets, excluding the divested business.
What Happens Next
The transaction is expected to close around mid-2026, pending antitrust approvals by the revised July deadline. Johnson Matthey will proceed with a reduced £1 billion shareholder return, including an £800 million special dividend and £200 million share buyback. Investors will monitor the company's ability to meet its updated financial targets without the Catalyst Technologies division.
Frequently Asked Questions
Why did Honeywell reduce the deal price?
Honeywell trimmed the price due to Johnson Matthey's Catalyst Technologies business performance, including deferred sustainable solutions projects and weaker catalyst demand in a challenging market.
How does the price reduction affect shareholders?
Shareholder returns were cut to approximately £1 billion from £1.4 billion, reducing the per-share value by around £2.7, contributing to the 15% stock decline.
What is the new deadline for the deal?
The long-stop date for antitrust approval was extended to July 21, 2026, with a potential further extension to August 21 if conditions are met.
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