French industrial gases company Air Liquide to acquire its U.S peer, Airgas for $10.3bn
The acquisition of Airgas by Air Liquide will benefit the latter as the deal will increase its geographic reach in the resilient US market and offer it continuous growth opportunities https://www.airliquide.com/media/air-liquide-group-press-kit

French industrial gases and services company, Air Liquide has agreed to buy its American peer, Airgas. Benoit Potier, chief executive at Air Liquide justified the move by saying the acquisition increased the company's geographic reach in the US market.

The deal valued at $10.3bn (£6.8bn, €9.6bn) will require the French company to pay Airgas shareholders $143 a share. Including debt, the deal's value is higher at $13.4bn. The Paris-headquartered company said that in order to finance this deal, it has planned to refinance existing debt and expected its earnings to get a boost in the first year.

David Manthey, an analyst at Robert W Baird & Co, said that an acquisition of Airgas would make strategic sense to any large gas producer, as the company was a clear leader in packaged gas distribution in the US.

Airgas, which has a 25% market share, says it is the biggest producer of nitrous oxide in North America. The Radnor, Pennsylvania-headquartered company too has made acquisitions in the past. It purchased the packaged gas businesses of two top players, that of Air Products and Chemicals in 2002 and The Linde Group in 2007.

The strong US dollar and the slowing demand from heavy industries have negatively impacted industrial gas producers in the country. Many companies in the last few years have moved away from this packaged and bottled gases business, which have combined annual sales of $13bn in the US.

For Airgas, this is not the first time it has been pursued as an acquisition target. For most of 2010, its peer, Pennsylvania-headquartered Air Products & Chemicals chased the company before being turned down after a Delaware court upheld Airgas's so-called poison-pill shareholder rights plan. Airgas at that time was expecting a minimum price of $78 per share.

Fabienne Lecorvaisier, Air Liquide's CFO said that though this deal could face a lengthy antitrust process, she expects to get approvals without selling "anything really significant."

Air Liquide which has operations across 80 countries, makes large volumes of gases including hydrogen used for car-charging stations. It has clients in industries ranging from steel to pharmaceuticals and in America alone, it operates more than 140 industrial gas plants.

On the other hand, Airgas produces cylinders of gases used in food production, manufacturing, health care and to fill helium balloons. It posted sales of $5.3bn for the year ended 31 March.

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