Air Products Completes $1.81 Billion Sale of Liquefied Natural Gas Process Technology and Equipment Business to Honeywell
Rhea-AI Summary
Air Products (NYSE: APD) has completed the sale of its liquefied natural gas (LNG) process technology and equipment business to Honeywell for $1.81 billion in cash. The strategic divestiture, first announced in July 2024, reflects Air Products' commitment to its two-pillar growth strategy: profitably growing its core industrial gases and related equipment businesses, and delivering clean hydrogen at scale.
The transaction includes the transfer of related assets, intellectual property, manufacturing capability, and approximately 475 employees, as well as the Port Manatee, Florida coil-would heat exchanger manufacturing facility. Lazard, Inc. served as financial advisors, while Skadden, Arps, Slate, Meagher & Flom LLP provided external legal counsel for the deal.
Positive
- Completed sale of LNG business for $1.81 billion in cash
- Strategic alignment with core industrial gases and clean hydrogen growth strategy
- Successful transfer of assets, IP, and manufacturing capability to Honeywell
Negative
- Loss of approximately 475 employees to Honeywell
- Divestiture of Port Manatee manufacturing facility
Insights
The sale of Air Products' LNG business to Honeywell for
- Strengthened balance sheet with a substantial cash infusion
- Potential for reinvestment in high-growth areas or shareholder returns
- Streamlined operations by divesting a non-core business
However, investors should consider the long-term impact on revenue streams and growth potential. The LNG business likely contributed to APD's diversification and may have offered synergies with other segments. The market's reaction will depend on how effectively APD deploys the proceeds and executes its two-pillar strategy. This move could accelerate APD's position in the clean energy transition, potentially offsetting any lost growth from the LNG segment.
This divestiture signals a clear strategic shift for Air Products, doubling down on industrial gases and clean hydrogen. The
- Increased investor focus on APD's execution in clean hydrogen projects
- Potential for increased M&A activity or capacity expansion in core areas
- Heightened competition in the industrial gas sector as APD concentrates resources
The market will likely view this positively in the short term due to the cash influx, but long-term performance will hinge on APD's ability to capitalize on clean energy trends and maintain growth without the LNG segment. Investors should monitor APD's capital allocation decisions and progress in hydrogen initiatives to gauge the success of this strategic pivot.
- Strategic divestiture reflects Air Products' commitment to its industrial gases and clean hydrogen growth strategy
- All related assets, intellectual property, manufacturing capability, and personnel have successfully transferred to Honeywell
The divestiture of the LNG process technology and equipment business is strategic, reflecting Air Products' firm focus on its two-pillar growth strategy to profitably grow its core industrial gases and related equipment businesses, and to deliver clean hydrogen at scale.
With the sale, related assets, manufacturing capability and personnel associated with the LNG process technology and equipment business have transferred successfully to Honeywell, including approximately 475 employees and the
Chairman, President and Chief Executive Officer Seifi Ghasemi said, "I want to thank our former LNG colleagues for their contributions, hard work and expertise, which have built a strong foundation that Honeywell can now take forward. Air Products remains laser focused on creating shareholder value by executing our growth strategy in industrial gases and clean hydrogen to drive the energy transition and decarbonize."
Lazard, Inc. served as financial advisors to Air Products, while Skadden, Arps, Slate, Meagher & Flom LLP provided external legal counsel.
About Air Products
Air Products (NYSE: APD) is a world-leading industrial gases company in operation for over 80 years focused on serving energy, environmental, and emerging markets. The Company has two growth pillars driven by sustainability. Air Products' base business provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemicals, metals, electronics, manufacturing, and food. The Company also develops, engineers, builds, owns and operates some of the world's largest clean hydrogen projects supporting the transition to low- and zero-carbon energy in the heavy-duty transportation and industrial sectors. Additionally, Air Products provides turbomachinery, membrane systems and cryogenic containers globally.
The Company had fiscal 2023 sales of
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SOURCE Air Products
FAQ
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