Johnson Matthey to sell Catalyst Technologies to Honeywell for £1.8bn

(Sharecast News) - Johnson Matthey surged on Thursday as the chemicals firm said it has agreed to sell its Catalyst Technologies business to Honeywell for £1.8bn. In the announcement, which came alongside the company's full-year results, it said the deal was expected to deliver net proceeds of around £1.6bn, of which £1.4bn will be returned to shareholders after completion.

Johnson Matthey said that following the sale, it will be "repositioned as a highly streamlined group focused on Clean Air and PGMS, driving sustained strong cash generation to support attractive ongoing returns to shareholders".

Chief executive Liam Condon said the sale marked a "significant milestone" in the history of the company.

"This allows JM to realise a very attractive valuation for this business that fully reflects its strong long-term growth prospects," he said.

"We will now fundamentally re-shape Johnson Matthey into a more focused and leaner business. This will better position us to leverage our strong capabilities and leading market positions in Clean Air and PGM Services to drive a step change in sustainable cash generation with higher returns to shareholders. JM is a great company and we are confident that the actions we have announced today will deliver substantial and sustainable value to our shareholders."

News of the sale came alongside results for the year to the end of March 2025, which showed that pre-tax profit rose to £486m from £164m the year before, while revenue ticked down to £11.7bn from £12.8bn.

The company said full-year results were underpinned by a strong second half and were in line with guidance and market expectations, against challenging market headwinds.

"This resilient performance reflects the strength of our businesses and the strategic progress delivered, including cumulative benefits of £200 million from our 2021/22 to 2024/25 group transformation programme," said Condon.

At 0955 BST, the shares were up 28% at 1,774p.

Russ Mould, investment director at AJ Bell, said: "Johnson Matthey is following a well-trodden path of companies who veered out of their comfort zone, couldn't make it work on a grand scale, and who are now retreating back to what they do best.

"Having sold its battery materials business in 2022 after failing to make sufficient returns, last year it also offloaded its medical device components arm, and there's now another disposal. The chemicals group is selling its Catalyst Technologies operation, which is involved in decarbonisation.

"Johnson Matthey is one of several companies on the UK stock market including Smith & Nephew which feel as if they've been in turnaround mode for years, but where progress has been slow. It's been under pressure from activist investors to reshape the business and no doubt the latest disposal will have been influenced by such shareholders.

"The sharp rise in the share price implies that investors are happy with the new strategic move and its latest numbers. The full-year results talk about driving a 'step change' in sustainable cash generation by having a tighter grip on costs, much lower spending in the business and working capital benefits. That's exactly what investors want to hear.

"Johnson Matthey is finally making progress with the 'shrink to greatness' strategy that many companies have been following in recent years. Today's share price rebound is impressive but the stock is still trading at less than half the peak achieved in 2018."