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- Acquisition’s strong industrial and market logic ideally positions company for future growth and
long-term value creation
- More than $300 million in synergies identified, with the majority to be achieved within the next two
to three years
- Air Liquide strengthens its global leadership in the industrial gas industry
Globally, the combined businesses will generate annual sales of more
than €20 billion (more than $22 billion at current exchange rates[[Calculated as of Friday, 20 May 2016.]]
), employ approximately 68,000 people
around the world, and serve well over three million customers and patients.
Benoît Potier, Chairman and CEO of Air Liquide, said
: “We are very pleased to have successfully closed
our acquisition of Airgas, which will contribute to our strategy of profitable growth over the long term.
There is strong industrial and market logic to this acquisition, which ideally positions Air Liquide for
future growth. The two businesses are highly complementary, and the transaction extends our customer
base through a unique, multi-channel distribution network and a nationwide presence in the U.S. Since
founding Airgas some 30 years ago, Peter McCausland has successfully grown the business into one of
the premier industrial gas companies in the U.S., and I would like to thank him for his leadership,
dedication and achievements. This transaction represents significant value potential for all Air Liquide
stakeholders, and it is an exciting day for the Group as we welcome our Airgas colleagues and together
begin a new chapter in our history.”
Peter McCausland, Executive Chairman of Airgas
, said: “Today’s history-making transaction is the
culmination of more than 30 years of growth and value that we have steadfastly delivered to Airgas
shareholders – it is a proud moment. The future is very bright for Airgas’ more than one million
customers and our talented employees as we join Air Liquide’s unrivalled global footprint and strength
in technology and innovation, while remaining committed to Airgas’ product offering, service model,
and entrepreneurial culture. Thank you to our customers, shareholders, and associates for believing in
the Airgas vision, just as I have, for all of these years.”
Under the terms of the merger agreement, first announced and unanimously approved by each
company’s Board of Directors in November 2015, Airgas shareholders receive $143 in cash for each
share of common stock of Airgas. In connection with the merger, the Airgas common stock has been
delisted from the New York Stock Exchange. Airgas will operate as a subsidiary of Air Liquide within the
company’s U.S. operations and, commercially, will go to market as Airgas, an Air Liquide company.
Strategic Rationale:
- There is strong industrial and market logic to this acquisition, which ideally positions the Group
for future growth and long term value creation.
It allows Air Liquide to expand in the U.S., the
largest global market for industrial gases, and extends Air Liquide’s customer base by more than one
million customers. The transaction will also create efficiencies in production and supply chain thanks
to the complementary nature of the two businesses, and allows for potential volume growth using
Airgas’ footprint to accelerate the deployment of Air Liquide’s new offerings and technologies. The
acquisition also brings with it the most advanced multi-channel distribution network in the U.S.,
including e-commerce and telesales capabilities.
- The transaction is expected to generate significant synergies.
Through active preparation work
prior to the closing, more than $300 million of pre-tax industrial, administrative and volume growth
synergies have been identified, the majority of which are targeted for delivery within the next two
to three years, and are structured in detailed work plans.
- The combination represents significant value potential for all Air Liquide stakeholders, including
shareholders, customers, and employees
. The transaction will be accretive from year one of
ownership. Air Liquide and Airgas together will deliver greater value, service and innovation to
customers in North America and around the world by allowing Air Liquide to offer its leading
production and innovation capabilities to a broader customer base. This combination also creates
new opportunities for employees as part of a leading global organization that is ideally positioned
for growth.
- The combination strengthens Air Liquide’s global leadership in the industrial gas business.
Air Liquide becomes the leader in North America, complementing number one positions in Europe,
Middle East/Africa and Asia-Pacific. It will also be number one in Industrial Merchant, Large
Industries and Electronics, and one of the key players in Healthcare.
Leadership Announcements:
- Peter McCausland, Executive Chairman of the Board of Airgas, retired upon closing of the
transaction.
- Pierre Dufour, Senior Executive Vice-President and Board Director of Air Liquide, has been
appointed Chairman of the Board of Airgas.
- Michael Graff, Member of the Air Liquide Group’s Executive Committee and Executive VicePresident
of the Houston Hub, has been appointed Vice Chairman of the Board of Airgas.
- Pascal Vinet, Member of the Air Liquide Group’s Executive Committee, will be appointed CEO of
Airgas, after a brief, post-closing transition phase. During this transition phase, Michael Molinini will
continue with his current responsibilities, serving as Interim CEO of Airgas, and he will retire later
this year.
- Andrew Cichocki has been promoted to the role of Chief Operating Officer of Airgas, where his
responsibilities will include direct oversight of the combined companies’ Industrial Merchant and
Healthcare activities in the U.S., which are being consolidated under Airgas.
Next Steps:
- Air Liquide will pursue and finalize sales of certain assets of the combined company in line with the
divestiture process described in the U.S. Federal Trade Commission’s press release on 13 May 2016.
The contemplated divestitures are in line with what Air Liquide was expecting prior to the
transaction, and they will reduce the combined company’s sales by approximately $270 million
annually.
- Air Liquide received bridge financing for the transaction and refinancing of the acquisition will
involve a capital increase in the range of €3 billion to €3.5 billion, together with a combination of
U.S. dollar and Euro long-term bonds. Air Liquide is contemplating a capital increase with
preferential subscription rights for shareholders at the end of Q3 2016 or the beginning of Q4 2016,
subject to market conditions.
- Air Liquide management will hold a Capital Markets Day for investors and analysts on 6 July 2016 in
London, where the new Group mid-term plan will be presented.
Barclays Bank Plc and BNP Paribas are acting as financial advisors to Air Liquide. Cleary Gottlieb Steen &
Hamilton LLP and Bredin Prat are acting as the primary legal advisors to Air Liquide.
Goldman Sachs and Bank of America Merrill Lynch are acting as financial advisors to Airgas and
Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Airgas.
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