Honeywell To Acquire Air Products' LNG Process Technology, Equipment Business

Honeywell Inc. said it will acquire chemicals and gas company Air Products' liquefied natural gas process technology and equipment business for $1.81 billion in an all-cash transaction. This represents approximately 13-times estimated 2024 Ebitda.

The acquisition will allow Honeywell to offer customers a comprehensive solution for managing their energy transformation journey. The new offering will include natural gas pre-treatment and liquefaction, utilising digital automation technologies unified under Honeywell Forge—its internet of things platform—and Experion—a process knowledge system platform.

Currently, Honeywell provides a pre-treatment solution serving global LNG customers. Air Products' complementary LNG process technology and equipment business consists of in-house design and manufacturing of coil-wound heat exchangers and related equipment. CWHEs provide the highest throughput of natural gas in a single exchanger with a small footprint and reliable and safe operations, both onshore and offshore.

"While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands," said Vimal Kapur, chairman and chief executive officer of Honeywell.

"This highly complementary acquisition will further strengthen our energy transition portfolio, and Air Products' CWHE technology will immediately expand our installed base—creating new opportunities to compound growth in aftermarket services and digitalisation through our Honeywell Forge platform," Kapur said.

The LNG market has quadrupled over the past 20 years and is expected to double over the next two decades, driven by demand in end markets such as power and data centres, according to industry research.

"The decision to divest our LNG heat exchanger technology and equipment business reflects Air Products' continued focus on its two-pillar strategy—to grow our core industrial gas business and related technology and equipment, and to be a first-mover delivering clean hydrogen at scale to decarbonise industrial and heavy-duty transportation sectors," said Air Products' chairman, president and chief executive officer Seifi Ghasemi.

The transaction, which is expected to be adjusted earnings per share accretive in the first full year of ownership, is not subject to any financing conditions and is expected to close before the end of the calendar year, subject to customary closing conditions, including receipt of certain regulatory approvals.