Honeywell to acquire Air products’ LNG technology and equipment business 

The acquisition will build on Honeywell’s energy transition capabilities by creating an end-to-end offering for customers worldwide. It will create new opportunities for diversified growth and innovation in aftermarket services and software.

Honeywell and Air Products announced that Honeywell will acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in an all-cash transaction, representing approximately 13x the estimated 2024 EBITDA.

As a result of the acquisition, Honeywell offers 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, utilising digital automation technologies unified under the Honeywell Forge and Experion platforms. This full-service solution will enable efficient, reliable, and optimised management of natural gas assets, delivering unparalleled value and support.

Honeywell provides a pre-treatment solution serving LNG customers globally. Air Products’ complementary LNG process technology and equipment business has 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,” Kapur added.

“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. The LNG business is great and at its strongest point in its decades-long history, thanks to the outstanding work of our people, and they will be in good hands to advance as part of Honeywell’s related portfolio of technologies,” 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 centres, according to industry research.

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

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, 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 the receipt of certain regulatory approvals.