Air Liquide will acquire Airgas Inc. for $13.4 billion

Air Liquide is willing to pay a whopping sum of $10.3 billion, which does not include Airgas’ $3.1 billion debt.

Air Products (NYSE:APD), which initially rallied, closed off 0.6%. Air Products had sought to buy Airgas several years ago.

The offer represents “a hefty scarcity premium that still lingers in the consolidated world of industrial gases”, Bloomberg News quoted JPMorgan Cazenove analysts as saying. Airgas and Air Liquide together can create tremendous value.

A worker passes by an Air Liquide logo at the Air Liquide hydrogen plant in Port Jerome, France, on Friday, July 24, 2009.

Shares of Airgas rose 29 percent, or $31.17, to $137.35 Tuesday.

The deal, unanimously approved by the companies’ respective boards, is subject to regulatory and Airgas shareholders’ approval. “It’s the fastest growing market among advanced economies”.

Airgas will then become a wholly-owned subsidiary of Air Liquide.

Air Liquide said the deal would allow it to save US$300 million in costs. It also supplies medical gases that help patients breathe, relieve pain or are used in anaesthesia.

Germany-based Linde is still consolidating its $4.6bn acquisition of Lincare, which it completed in 2012, Raquet said.

LONDON, Nov 18 European shares fell on Wednesday, retreating from solid gains in the previous session, with industrial gas company Air Liquide slipping after announcing an expensive-looking acquisition.

Over the last 30 years, Airgas and other distributors have been buying out other companies, he said.

It cautioned, however, that rival bids would have to come up with vastly better synergy benefits to justify a challenge to Air Liquide’s high bid.

Air Liquide said it had committed bridge financing for the transaction and intends to refinance it through a capital increase in the range of 3 billion euros to 4 billion euros, and a combination of USA dollar and Euro long-term bonds. The enterprise value of the deal is $13.4bn. The transaction is expected to be accretive from year one.

“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, ” Airgas executive chairman Peter McCausland said.

The acquisition has enabled Air Liquide to take the top spot in North America. Air Liquide also sells gases for pharmaceutical and electronics manufacturing.