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Johnson Matthey, stock market leap after the sale of Catalyst Tech. to Honeywell

The British chemical group's stock gained more than 30% on the announcement of the £1.8 billion divestment

by R.Fi.

22 May 2025

2' min read

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Johnson Matthey's Quarterly

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Johnson Matthey is flying on the London Stock Exchange after announcing the sale of a £1.8 billion division as a prelude to a more generous distribution to shareholders. The British chemicals group's share price surged 34 per cent in the morning and then fell back slightly, however, marking the largest jump in the Stoxx Europe 600 index during the session.

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Johnson Matthey announced that it has reached an agreement to sell its Catalyst Technologies division to Honeywell International for an enterprise value of £1.8 billion, 'in cash and debt-free'.

The division designs and manufactures catalysts used in the energy and chemical sectors, enabling the production of sustainable aviation fuel, fertilisers, paints, and other applications. As the company states, 'the transaction is expected to yield net proceeds of approximately GBP 1.6 billion to the group'. JM underlines the particularly favourable valuation of the sale, as the amount represents a multiple of 13.3 times Ebitda.

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In addition, the company intends to return1.4 billion, or 88% of the net proceeds of the sale, or £8 per share, to shareholders upon completion of the transaction, which is expected in the first half of 2026. The company also highlights the repositioning of the group, which will be more focused, with greater operational efficiencies 'supporting average annual operating profit growth of at least 5% from 2024-25 to 2027-28'.

A 'significant increase' in cash generation is then expected with free cash flow of at least £250m by 2027-28. Johnson Matthey also expects an increase in total cash return to shareholders to at least 200 million in 2026-27 and beyond from at least 130 million in 2025-26.

"Today's announcement represents a significant milestone in Johnson Matthey's history. Following the sale of our medical devices business at an extremely attractive valuation, we have agreed the sale of our Catalyst Technologies business for £1.8 billion. This allows JM to realise a very attractive valuation for this business. We will now radically reshape Johnson Matthey into a more focused and leaner business. This will allow us to better leverage our strong capabilities and market leadership position in clean air services and air purification products to drive a radical shift in cash generation with higher returns for shareholders,' CEO Liam Condon was quoted as saying in a statement.

Johnson Matthey's quarterly report

At the same time as announcing the sale of the division, Johnson Matthey released its preliminary results for 2025 (as of 31 March). Revenues fell by 9% to £11.7 billion, operating profit rose to 538 million from 249 million a year earlier, reflecting a 482 million gain on the sale of assets, partly offset by write-downs and reorganisation costs of 329 million. Net profit improved to EUR 373 million from EUR 108 million. The company emphasises that the year's performance was supported by 'a strong second half and is in line with guidance and market expectations in a difficult environment'.