Failing to sell entire battery business, Johnson Matthey will now sell individual assets and close it
On 11 November 2021, Johnson Matthey announced its intention to pursue the sale of all or parts of its Battery Materials business with the ultimate intention of exiting. (Earlier post.) Although demand for battery materials is accelerating, so is competition from alternative technologies and other manufacturers, the company said at the time. Consequently this is rapidly turning into a high-volume, commoditized market, the company explained.
In an update, the company reported that it has held discussions with a number of parties about a sale of the entire business. These discussions have not resulted in an agreement to sell the entire business as a going concern.
Consequently, the company is commencing consultation with employees about the proposed closure of the Battery Materials business, and is pursuing the sale of its individual assets.
In the interim results the company fully impaired the carrying value of the battery materials assets as at 30 September 2021, resulting in a charge of £314 million (US$430.4 million).
While the outcome of the sales process is uncertain, full or partial closure will result in additional impairment charges, the settlement of contractual liabilities, redundancy, closure and abandonment costs. After anticipated asset disposal proceeds, the company currently estimates these cash costs will be in the order of £150 million (US$206 million), which will be recorded as an exceptional item outside of underlying operating profit in full year results.