Major LNG takeover announced

Honeywell’s billion dollar deal

Honeywell will acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for US$1.81 billion in an all-cash transaction.

As a result of the acquisition, Honeywell said it will be able to offer customers a comprehensive, top-tier solution for managing their energy transformation journey. The new holistic offering will encompass natural gas pre-treatment and state-of-the-art liquefaction, utilizing digital automation technologies unified under the Honeywell Forge and Experion platforms. This full-service solution will enable efficient, reliable and optimized management of natural gas assets, the company said.

A completed LNG heat exchanger manufactured at Air Products’ Port Manatee facility is being loaded on a carrier at the Port of Manatee for shipment to the customer. (Image: Air Products)

Currently, Honeywell provides a pre-treatment solution serving LNG customers globally. 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. 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.

“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 CEO 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 digitalization through our Honeywell Forge platform.”

The decision to divest its LNG heat exchanger technology and equipment business reflects Air Products’ continued focus on its two-pillar strategy -- to grow its 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, said Air Products’ Chairman, President and Chief Executive Officer Seifi Ghasemi.

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 according to industry research.

Ken West, President and CEO of Honeywell’s Energy and Sustainability Solutions (ESS) segment, said the integration of Air Products’ team and the acquired proprietary technologies will enable Honeywell UOP to bring a full spectrum of scalable solutions and services that help global customers navigate the complex journey to more sustainable and efficient energy practices.

Air Products’ LNG Business has approximately 475 employees with headquarters in Allentown, Pennsylvania and a 390,000-square-foot manufacturing facility in Port Manatee, Florida, where all sizes of CWHEs are made. Overall, Air Products has roughly 23,000 employees worldwide.

This is the fourth acquisition Honeywell has announced this year as part of its disciplined capital deployment strategy. 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.

This 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.

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