What Faster Air Liquide-Airgas Closing Means for Sector - Modern Distribution Management

What Faster Air Liquide-Airgas Closing Means for Sector

Mixed channel dynamics happening sooner than expected for industrial gases companies.
Eric-Smith-84x84

The faster-than-expected closing of Air Liquide's acquisition of Airgas, as detailed in the Paris-based company's first-quarter earnings report, will also fast-track some mixed channel dynamics for the gases & welding equipment sector.

Though Air Liquide had previously predicted closing the $10.3 billion deal as late as the third quarter, the "acquisition timing might shorten, with possible completion by late" second quarter, the company said this week.

"I'm happy to report that the Airgas transaction is on track in all of its aspects, regulatory approvals, integration plans, synergies and financing," Pierre Dufour, Air Liquide senior executive vice president, told analysts during this week's earnings call. "Most of the critical aspects of integration related to systems, people and work processes have progressed very well and will be ready for implementation by closing."

A quicker closing period shortens the window for gases & welding equipment distributors to take advantage of the transition, according to respondents to the most recent MDM-Baird Distribution Survey.

While first-quarter revenue trends were "uneven” in the industrial gases category, according to the survey, respondents project the Airgas-Air Liquide deal to bring mixed channel dynamics, including some opportunities to prosper.

"In the short term, I expect the disruption of consolidation will create an opportunity for competitors," said one respondent. "The longer term could create risk based on national account offerings, share density in certain markets and scale."

"Initially it could be a unique opportunity to increase market share and establish advantages for our customers to work with independent distributors," said another respondent. "Ultimately, however, the pendulum will swing back to price pressure."

Gases & welding equipment distributors – especially independent distributors, said yet another survey respondent – should get aggressive now before the newly merged Air Liquide and Airgas "present a threat as they become more vertically integrated."

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!