Johnson Matthey Plc confirmed on Monday that Honeywell International Inc. has renegotiated the price for the sale of its Catalyst Technologies business, reducing the consideration to £1.33 billion from the £1.8 billion previously agreed in May 2025. The updated figure was disclosed in a regulatory filing to the London Stock Exchange and immediately weighed on the shares of the British speciality chemicals group, which fell roughly 15% following the announcement.
The lower payment decreases the quantum of cash Johnson Matthey intends to return to shareholders - now estimated at approximately £1 billion versus a prior plan of about £1.4 billion. That programme consists of an £800 million special dividend together with a £200 million on-market share buyback, accompanied by a share consolidation.
The filing also showed an extension to the long-stop date for satisfying antitrust approval conditions. The date has been moved from Feb. 21 to July 21, and the parties may extend it further to Aug. 21 if specified conditions are met. Johnson Matthey said the transaction is expected to close around mid-year.
In explaining the reduced price, Johnson Matthey attributed the move to Catalyst Technologies’ recent business performance. The company cited the deferral of certain key sustainable solutions licensing projects and softer demand for catalyst supplies, characterising the environment as "the challenging market environment." No additional adjustments to the structure of the deal were disclosed in the regulatory note.
Despite the change to the disposal proceeds, Johnson Matthey reiterated its fiscal 2025-26 objectives on a pro forma basis that excludes Catalyst Technologies and its Value Businesses. The group said it remains on track to achieve underlying operating profit growth "at the higher end of a mid single digit percentage range" and to deliver free cash flow that is "materially higher than last year," assuming constant metal prices and constant currency.
Market participants responded quickly. Shares in Johnson Matthey, which stood at 2,304 pence at Friday’s close and implied a market capitalisation of about £3.9 billion, moved markedly lower after the deal repricing was announced. Jefferies, which maintains a Buy rating on the stock with a price target of 2,420 pence, noted that the revised consideration was preferable to press reports suggesting Honeywell might seek to terminate the agreement.
Jefferies also highlighted that the £1.33 billion payment compares favourably with the bank’s sum-of-the-parts valuation of the business, which it had estimated at around £700 million before the transaction was announced. The broker calculated the reduction in consideration represented roughly £2.7 per Johnson Matthey share, though it added that the net effect could be slightly lower after tax.
The combination of a reduced sale price, a trimmed shareholder return, and extended regulatory timing underscores the near-term uncertainty surrounding the disposal, while management continues to project steady underlying performance for the remaining group operations.
Key points
- Honeywell lowered the acquisition price for Johnson Matthey's Catalyst Technologies unit from £1.8 billion to £1.33 billion, reducing the planned shareholder return to around £1 billion.
- Antitrust long-stop dates have been extended to July 21 with a potential further extension to Aug. 21; the deal is expected to close around mid-year.
- Johnson Matthey maintains fiscal 2025-26 guidance on a pro forma basis excluding the sold businesses, while analysts note the revised price still exceeds their prior standalone valuation of the unit.
Risks and uncertainties
- Regulatory approval timing - the extended long-stop dates signal potential delays in antitrust clearance that could affect the transaction timeline and shareholder returns.
- Operating performance of Catalyst Technologies - deferred licensing projects and weaker catalyst demand were cited as reasons for the price reduction, indicating ongoing market challenges in that business.
- Per-share impact after tax - the estimated reduction of approximately £2.7 per share could be slightly less after tax, introducing uncertainty about the ultimate shareholder cash impact.
Market sectors affected include speciality chemicals, industrials and equity investors exposed to Johnson Matthey.