One of the largest M&A deals to hit the distribution space in years – Air Liquide's $10.3 billion purchase of Airgas Inc. – wouldn't have happened if Airgas had accepted a $5.8 billion takeover attempt by Air Products in 2011.
But the company's decision to reject that offer, which Airgas Executive Chairman Peter McCausland at the time called the "proposed steal of Airgas by Air Products," has paid off in a big way. Airgas announced this week that it accepted Paris-based distributor Air Liquide's offer, which reaches $13.4 billion including debt and is double what Air Products offered four years ago.
McCausland's tenor was different this week when discussing this deal. The industrial gases and welding hardgoods companies refer to the acquisition as a "game changer" because it "strengthens Air Liquide's global leadership position, offers new opportunities to Airgas' customers and delivers significant value to shareholders."
"Air Liquide's long-term vision and strong heritage in the U.S. make it the right fit for our valued customers," McCausland said. "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."
Benoît Potier, CEO of Air Liquide, was equally upbeat about the deal that will help it surpass its chief global competitor, Linde AG, as well as firmly entrenching it as the top gases distributor in the U.S.
"This acquisition increases our geographic reach in the resilient U.S. market and offers continuous growth opportunities," he said. "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, which has more than 16,000 employees at 1,100 locations, reported 2014 revenues of $5.1 billion, up 2.3 percent from the previous year. Air Liquide reported 2014 revenues of €15.4 billion (US$16.4 billion).
