• The acquisition will build on Honeywell’s energy transition capabilities by creating an end-to-end offering for customers worldwide
• The combination will create new opportunities for diversified growth and innovation in aftermarket services and software
• The transaction is expected to be immediately accretive to Honeywell’s sales growth and segment margin while also accretive to adjusted EPS in the first full year of ownership
• Air Products to continue its focus on its industrial gas business and related technology and equipment and drive the energy transition through clean hydrogen at scale

INDIA: Honeywell (Nasdaq: HON) and Air Products (NYSE: APD) jointly announced today that Honeywell has agreed to acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in an all-cash transaction. This represents approximately 13x the estimated 2024 EBITDA.

As a result of the acquisition, Honeywell 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, delivering unparalleled value and support.

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,” 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 decarbonize industrial and heavy-duty transportation sectors,” said Air Products’ Chairman, President and Chief Executive Officer Seifi Ghasemi. “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.”

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 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.”

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.

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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Destination Zero is Cummins’ strategy to go further and faster in minimizing the greenhouse gas (GHG) and air quality impacts of its products. Anchored in its commitment, Cummins is pursuing a dual-path approach – acting today to reduce emissions from internal combustion engines while simultaneously investing in the development of new, zero-emissions products, to help customers navigate through the energy transition.

Speaking at the event, Anjali Pandey, Chief Operating Officer, Cummins Group in India further emphasized, “As an industry leader, Cummins recognizes its crucial role in addressing global climate challenges. We understand that transitioning to a decarbonized future is not a light-switch event and will require multiple solutions. Hence, we are continuously investing and innovating to develop technologies that align with our commitment, ensuring our customers’ success today while contributing to a more sustainable tomorrow. Our showcase at SIAT 2024, reflects our versatility and adaptability to meet the evolving needs of the transportation sector.”

The products that will be on display at the symposium (Stall 46 and 47) include:

Next-gen, industry-first fuel-agnostic platform

Cummins will showcase its innovative fuel-agnostic platform at SIAT 2024, demonstrating an effective way to reduce emissions, across various fuels. In the pursuit of decarbonization, it is imperative to bring various powertrain technologies that leverage the available low and zero-carbon fuels. This approach provides end users with options and flexibility to select fuels based on infrastructure availability thus optimizing the economics of transportation operations.

The fuel-agnostic architecture of this platform utilizes a common base engine, with the application of innovative technologies like a Direct Injection Fuel System, two-stage turbocharging, overhead cam, closed crankcase ventilation, and pent-roof cylinder head design. Additionally, it features Cyber Security and Functional Safety Compliant Control Modules tuned for specific fuels such as diesel, natural gas, renewable natural gas, and hydrogen. This platform ensures diesel-like performance across fuels, enabling OEMs to offer multiple fuel types with minimal product modification, and expediting market entry at the most optimum cost.

At the SIAT 2024, Cummins’ fuel-agnostic platform concept will be demonstrated through:

Hydrogen Internal Combustion Engine

The Cummins Hydrogen Internal Combustion Engine represents a significant stride towards sustainable and cleaner energy solutions in the automotive and industrial sectors. Leveraging the power of hydrogen as a clean fuel source, this innovative internal combustion engine operates with lower emissions. Combined with green hydrogen, it produces zero CO₂ emissions from well-to-wheel. During the event, Cummins will showcase solutions specifically designed for medium- and heavy-duty trucks and buses. These solutions highlight the engine’s ability to support decarbonization across a wide range of duty cycles.

Natural Gas Engine

Natural gas engines present a reliable and effective solution for reducing emissions while maintaining strong performance. With well-established credibility as an alternative power technology, these engines align with India’s vision of increasing the share of natural gas in the energy mix from 6% to 15% by 2030. To achieve this vision, substantial investments are planned for the development of Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) infrastructure. These investments will further enable the adoption of natural gas engines supporting the government’s long-term objectives.

Latest generation diesel

The latest-generation advanced diesel platform, which has a strong foundation of nearly 700,000 Euro VI, low-emission engines will be exhibited. These advanced diesel engines, further optimize fuel efficiency, enabling customers to achieve lower GHG emissions while enhancing power and torque.

Single Module Aftertreatment System 

Cummins is also showcasing its ultra-high efficiency aftertreatment system 9-inch (0.229 Meters) Single Module. This innovative system is up to 70% smaller and 40% lighter compared to systems with similar architectures. It offers improved NOx conversion efficiency that removes over 99% of all particulate matter (PM) by weight and count. The product is optimized with a liquid-only, freeze-robust UL2.2 dosing system, which significantly improves reliability. ‘Made in India’ with over 70% localized components, this product readily adapts to a variety of applications as it is available in catalyst diameters ranging from 5.66 inches (0.144 meters) to 13 inches (0.330 meters).

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