Honeywell to Acquire Air Products' LNG Process Technology and Equipment

Honeywell bolsters its energy transition portfolio through a strategic acquisition. The company has signed a definitive agreement to purchase Air Products' Liquefied Natural Gas (LNG) process technology and equipment business for USD 1.81 billion. This strategic acquisition positions Honeywell to deliver a holistic, best-in-class solution to customers navigating their energy transformation journeys.

This expanded offering will integrate natural gas pre-treatment and cutting-edge liquefaction technologies, leveraging digital automation through the Honeywell Forge and Experion platforms. This end-to-end solution is designed to optimize the management of natural gas assets, ensuring efficiency, reliability, and maximum value delivery.

Vimal Kapur, Chairman and CEO of Honeywell emphasized the pivotal role of natural gas as a crucial transition fuel amidst ongoing efforts to develop renewable energy infrastructure worldwide. He underscored its significance in addressing growing global energy demands while reducing emissions compared to traditional fossil fuels. Honeywell's stance reflects a commitment to supporting sustainable energy transitions by leveraging natural gas as a vital component in the evolving energy landscape.

Vimal highlighted the strategic significance of acquiring Air Products' CWHE technology, emphasizing its role in bolstering Honeywell's energy transition portfolio. The addition of CWHE technology is expected to expand their installed base, create new opportunities in aftermarket services, and enhance digitalization through the Honeywell Forge platform.

Seifi Ghasemi, Chairman, President, and CEO of Air Products, explained that the decision to divest their LNG heat exchanger technology and equipment business aligns with the company's strategic focus. Air Products aims to prioritize growth in its core industrial gas business and advance clean hydrogen solutions at scale for decarbonizing industrial and heavy-duty transportation sectors. Ghasemi acknowledged the strength of the LNG business, attributing its success to the dedication of Air Products' workforce. He expressed confidence in Honeywell's ability to further develop the LNG business within its technology portfolio.

Currently, Honeywell plays a pivotal role by providing a specialized pre-treatment solution tailored to meet the needs of global LNG customers. Air Products complements this offering with its extensive portfolio in LNG process technology and equipment. This includes the in-house design and manufacturing capabilities of coil-wound heat exchangers (CWHE) and associated equipment. CWHEs are renowned for their ability to efficiently handle high volumes of natural gas within a minimal footprint, ensuring resilient and secure operations, whether deployed onshore or offshore.

The LNG market has grown fourfold in the last two decades and is projected to double in size over the next twenty years, propelled by increasing demand from critical sectors such as power generation and data centers, according to industry research.

Honeywell's recent acquisition marks its fourth announcement this year as part of a strategic capital deployment approach. The company is targeting acquisitions with strong potential returns that will enhance growth across its portfolio, strategically aligning with key megatrends in automation, the future of aviation, and energy transition.

This acquisition is anticipated to increase adjusted earnings per share in the first full year of ownership and is not contingent on financing conditions. The transaction is expected to close by the end of the calendar year, pending customary closing requirements and regulatory approvals.