Air Products Sells LNG Solutions Unit to Honeywell for $1.81B

Honeywell International Inc. has signed an agreement to buy Air Products and Chemicals Inc.’s liquefied natural gas (LNG) process technology and equipment business for $1.81 billion.

The integration of Air Products’ offerings into Honeywell’s gas pre-treatment solutions would create a “full-service” portfolio that enables “efficient, reliable and optimized management of natural gas assets”, said a joint statement Wednesday.

“Air Products' complementary LNG process technology and equipment business consists of a comprehensive portfolio, including in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment”, the United States companies said. “CWHEs provide the highest throughput of natural gas in a single exchanger with a small footprint and robust, reliable and safe operations both onshore and offshore”.

The parties expect the all-cash transaction to close before the year ends, subject to customary closing conditions including regulatory approvals. The agreement includes the integration of the affected Air Products team, nearly 500 employees, into Honeywell.

"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 decarbonize industrial and heavy-duty transportation sectors”, Air Products chair, president and chief executive Seifi Ghasemi explained, adding that the LNG sector is at its “strongest”.

The companies’ statement said, citing a Deloitte report, “The LNG market has quadrupled over the past 20 years and is expected to double over the next two decades, driven by demand in key end markets including power and data centers”.

Charlotte, North Carolina-based Honeywell closed 1.85 percent higher at $214.49 on Wednesday on Nasdaq. Allentown, Pennsylvania-based Air Products closed flat at $255.66 on the New York Stock Exchange.

This is the fourth acquisition announced by Honeywell this year, with the acquisition of Carrier Global Corp’s Global Access Solutions completed in the second quarter. “The company is focused on high-return acquisitions that will drive future growth across its portfolio, which is aligned with the three compelling megatrends of automation, the future of aviation and energy transition”, said the statement about the Air Products acquisition.

Last month Honeywell said it had consummated its $4.95 billion purchase of Global Access Solutions, announced last December.

“The acquisition brings differentiated software capabilities through the addition of three respected brands to Honeywell's portfolio: LenelS2, a leader in commercial and enterprise access solutions; Onity, which offers electronic locks, specifically hospitality access and mobile credentials; and Supra, which specializes in cloud-based electronic lockboxes and scheduling software”, Honeywell said in a press release June 3.

On June 20 it bared a deal to take over Arlington, Virginia-based CAES Systems Holdings LLC from private equity firm Advent International for about $1.9 billion in cash.

“This acquisition will enhance Honeywell’s defense technology solutions across land, sea, air and space, including new electromagnetic defense solutions for end-to-end radio frequency signal management”, Honeywell said in a statement June 20. “With CAES’ scalable offerings and Honeywell’s current defense and space portfolio, the combined company will grow Honeywell’s established production and upgrade positions on critical platforms that include F-35, EA-18G, AMRAAM and GMLRS, while also introducing offerings on new platforms like Navy Radar (SPY-6) and UAS and C-UAS technologies”.

The transaction is expected to be finalized in the second half of 2024.

Last March Honeywell announced an agreement to acquire navigation technology provider Civitanavi Systems SPA in a EUR 200 million ($217.1 million) stock transaction.

“The acquisition will further strengthen Honeywell's capabilities to help its customers create autonomous operations in aircraft and other vehicles”, it said in a press release March 27.

The transaction is expected to close in the third quarter of 2024.

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