Honeywell lowers transaction price to £1.33 billion, Zhuangxin Wanfeng's stock price plunges 15%

Investing.com - Johnson Matthey Plc announced on Monday that, following Honeywell International Inc.'s agreement to acquire its catalyst technology business for £1.33 billion, the company will return less cash to shareholders. This price is a significant reduction from the £1.8 billion agreed upon in May 2025, causing the UK specialty chemicals manufacturer’s stock to plummet 15%.

According to regulatory filings submitted to the London Stock Exchange, the revised price reduces the planned shareholder return from £1.4 billion to approximately £1 billion, including an £800 million special dividend, a £200 million market buyback, and a share consolidation.

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The deadline for both companies to meet antitrust approval conditions has been extended from February 21 to July 21, with the possibility of further extension to August 21 if certain conditions are met.

Johnson Matthey stated that the price reduction reflects the operational performance of the catalyst technology business, including delays in key sustainable solutions licensing projects, as well as the “challenging market environment” described by the company, which has led to weak catalyst supply demand.

The transaction is expected to be completed around mid-year.

Johnson Matthey indicated that, excluding the catalyst technology and value-added businesses, and based on constant metal prices and exchange rates, it still expects to achieve a high single-digit percentage growth in underlying operating profit for fiscal years 2025-26, with free cash flow “significantly higher than last year.”

Jefferies has given Johnson Matthey a buy rating with a target price of 2,420 pence. The firm stated that the revised offer “remains more favorable than the situation reported over the weekend where Honeywell considered terminating the deal,” and noted that the £1.33 billion figure “still exceeds” the bank’s pre-deal valuation of the business at £700 million.

The broker added that the price reduction is equivalent to about £2.70 per share, after tax, possibly slightly less. As of Friday’s close, Johnson Matthey’s stock price was 2,304 pence, with a market capitalization of £3.9 billion.

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