Air Liquide has agreed to buy GEA Group AG's biofuel-factory division for â‚¬550m($745m) to meet increasing demand for sources of clean energy.
GEA's Lurgi unit will give Paris-based Air Liquide access to technology used to produce fuel from corn and soya beans, less-polluting liquid and chemical coals and hydrogen for making cleaner gasoline, the French company said in a statement.
A spokesman told Bloomberg News that Lurgi will focus primarily on developing new technology for Air Liquide's own manufacturing operations, as the French company seeks to tap new markets. $quot;Our capacity to innovate, in research and development as well as technology, is a key growth driver,$quot; Francois Darchi, Air Liquide's head of engineering and construction, said. $quot;The company will be better placed to design and make the large plants needed to enter new territories.$quot;
It's a time of growth for both companies, as Air Liquide Chief Executive Officer Benoit Potier recently raised earnings targets as environmental regulations have boosted orders for hydrogen used to lower the sulfur content of gasoline and diesel. GEA said last August it planned to sell Lurgi, which has annual sales of â‚¬850m and 1,300 workers, because it didn't have the resources to expand the unit to meet demand.
The sale of Lurgi is subject to regulatory approval, Air Liquide said. The transaction also includes pension liabilities and cash reserves which give it a so-called enterprise value of â‚¬200m.