Air Liquide to acquire Airgas
Air Liquide and Airgas announced an agreement under which Air Liquide will acquire Airgas.
Airgas shareholders will receive $143 per share in cash for all outstanding shares of Airgas, representing a total enterprise value of $13.4 billion (€12.5 billion at current exchange rates) on a fully diluted basis and including the assumption of Airgas debt.
The transaction represents a premium of +50.6% to Airgas’ one month average share price, prior to the announcement of the transaction, and of +20.3% over Airgas’ 52-week high share price.
In the transaction, Airgas will become a wholly-owned subsidiary of Air Liquide.
“This combination offers significant benefits for all of our stakeholders due to the highly complementary nature of the two businesses. It also advances Air Liquide’s vision to lead the industry and deliver longterm performance while acting responsibly," said Benoît Potier, chairman and CEO of Air Liquide. "This acquisition increases our geographic reach in the resilient U.S. market, and offers continuous growth opportunities. Airgas is the industry leader in U.S. packaged gases with a customer-centric organization and we are confident in our ability to successfully combine operations. Airgas is a unique partner, and together we will continue to advance our strategy based on profitable growth and innovation over the long-term.”
He added, “We have the highest respect for Airgas, its organization, its employees and its stakeholders, as well as for what they have achieved over more than 30 years. We look forward to working with their teams as we move to complete the transaction and combine both businesses.”
Peter McCausland, executive chairman of Airgas, said: “This transaction is compelling for our shareholders, arising from the persistent execution of our business strategy for more than three decades. Air Liquide’s long-term vision and strong heritage in the U.S. make it the right fit for our valued customers, and the combination creates significant opportunities for the talented employees of both companies. Airgas customers and employees will benefit from Air Liquide’s unrivalled global footprint and strength in technology, innovation and operational efficiency, while Airgas is ready to bring the entrepreneurial culture and packaged gas excellence that have driven our success to date. We are excited about the prospects of integrating these two businesses to create the largest industrial gas company in the world. We look forward to working closely with Air Liquide to complete the transaction and achieve a smooth transition.”
Strategic Rationale
Combining Air Liquide and Airgas will bring together two highly complementary businesses to deliver greater value, service and innovation to customers in North America and around the world, the company said. In the U.S., Airgas’ leadership in the packaged gases business and associated products and services and Air Liquide’s strong footprint in complementary activities will increase the scope and competitiveness of the combined companies’ product offering.
This acquisition gives Air Liquide a greater presence in the U.S. market, the largest for industrial gases worldwide, and will position Air Liquide for future growth. In addition, there is potential for further growth using Airgas’ footprint to accelerate the deployment of Air Liquide’s technologies.
The combination builds on Air Liquide’s track record of successfully operating in the U.S. and will benefit from Airgas’ national presence and its more than 1 million customers in the U.S., as well as from its customer-facing platform including e-commerce and telesales capabilities. The combined entity will be able to better serve customers with the most advanced multidistribution networks in the U.S. and more competitive product offerings thanks to an integrated upstream-downstream model.
The acquisition will increase Air Liquide's gas and services sales by around 30%.
The transaction is subject to Airgas shareholders’ approval, receipt of necessary antitrust and other regulatory approvals and other customary conditions and provisions. The two parties wish to proceed swiftly.
The transaction has been unanimously approved by each of Airgas’ and Air Liquide’s boards of directors, including executive chairman of Airgas Peter McCausland who is a significant shareholder, and an ad hoc committee of the Air Liquide board was established to participate in the process that led to the agreement between Airgas and Air Liquide.
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Joyce Lansdale and Vallen. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and David Kahle, as well as interviews with numerous product and distribution industry experts.
