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

Source: Air Products

This acquisition will enable Honeywell to provide customers a comprehensive solution for managing their energy transformation journey. The integrated offering will cover natural gas pre-treatment and advanced liquefaction, incorporating digital automation technologies under the Honeywell Forge and Experion platforms. This end-to-end solution aims to ensure efficient, reliable, and optimized management of natural gas assets, offering exceptional value and support.

Honeywell currently offers a pre-treatment solution to global LNG customers, while Air Products brings a complementary LNG process technology and equipment business, including the in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment. CWHEs are known for their high throughput of natural gas in a compact design, ensuring robust, 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. 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.

Vimal Kapur, Chairman and CEO of Honeywell

The LNG market has seen significant growth over the past two decades and is projected to double in the next 20 years, driven by demand in key sectors like power and data centers.

Air Products’ LNG Business, based in Allentown, Pennsylvania, employs around 475 people and operates a 390,000-square-foot manufacturing facility in Port Manatee, Florida, where CWHEs of all sizes are produced.

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. The LNG business is a great business 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.

Seifi Ghasemi, Chairman, President and Chief Executive Officer, Air Products

This marks Honeywell's fourth acquisition this year, in line with its strategic capital deployment approach. The company prioritizes acquisitions that promise high returns and future growth, aligning with key industry trends in automation, aviation, and energy transition.

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.

Ken West, President and CEO of Honeywell’s Energy and Sustainability Solutions (ESS) segment

The transaction is anticipated to enhance earnings per share in the first year of ownership and is set to finalize before the end of the current calendar year, pending standard closing conditions and regulatory approvals.