Air Liquide has reached an agreement to acquire Airgas in a game-changing combination that strengthens Air Liquide’s global leadership position, offers new opportunities to Airgas’ customers and delivers significant value to shareholders.

Combining Air Liquide and Airgas will bring together two highly complementary businesses to deliver greater value, service and innovation to customers in North America and around the world. It builds on Air Liquide’s longstanding track record of successfully operating in the US and will benefit from Airgas’ unmatched national presence and its more than 1 million customers in the US, as well as its leading customer-facing platform including e-commerce and telesales capabilities.

Acquisition will reinforce Air Liquide’s global leadership position:

  • Growth: +30% on Gas & Services sales
  • Geographically: #1 in North America, #1 in Europe, #1 in Africa/Middle East, #1 in Asia-Pacific.
  • By activity: #1 in Industrial Merchant, #1 in Large Industries, co-#1 in Electronics, worldwide.
  • Represents significant value for shareholders of both companies.

Airgas shareholders will receive $143 per share in cash for all outstanding shares of Airgas, representing a total enterprise value of $13.4bn (€12.5bn at current exchange rates) on a fully diluted basis and including the assumption of Airgas debt.

The transaction represents a premium of +50.6% to Airgas’ one month average share price, prior to the announcement of the transaction, and of +20.3% over Airgas’ 52-week high share price.

In the transaction, Airgas will become a wholly-owned subsidiary of Air Liquide.

Benoît Potier, Chairman and CEO of Air Liquide, said, “This combination offers significant benefits for all of our stakeholders due to the highly complementary nature of the two businesses. It also advances Air Liquide’s vision to lead the industry and deliver long-term performance while acting responsibly. This acquisition increases our geographic reach in the resilient US market, and offers continuous growth opportunities. Airgas is the industry leader in US packaged gases with a customer-centric organization and we are confident in our ability to successfully combine operations. Airgas is a unique partner, and together we will continue to advance our strategy based on profitable growth and innovation over the long-term.”

He added, “We have the highest respect for Airgas, its organization, its employees, and its stakeholders, as well as for what they have achieved over more than 30 years. We look forward to working with their teams as we move to complete the transaction and combine both businesses.”

Peter McCausland, Executive Chairman of Airgas, said, “This transaction is compelling for our shareholders, arising from the persistent execution of our business strategy for more than three decades. Air Liquide’s long-term vision and strong heritage in the US make it the right fit for our valued customers, and the combination creates significant opportunities for the talented employees of both companies. 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. We are excited about the prospects of integrating these two businesses to create the largest industrial gas company in the world. We look forward to working closely with Air Liquide to complete the transaction and achieve a smooth transition.”

Strategic Rationale

Combining Air Liquide and Airgas will bring together two highly complementary businesses to deliver greater value, service and innovation to customers in North America and around the world. In the US, Airgas’ leadership in the packaged gases business and associated products and services and Air Liquide’s strong footprint in complementary activities will increase the scope and competitiveness of the combined companies’ product offering.

This acquisition gives Air Liquide a greater presence in the US market, the largest for industrial gases worldwide, and will ideally position Air Liquide for future growth. In addition, there is potential for further growth using Airgas’ footprint to accelerate the deployment of Air Liquide’s technologies.

The combination builds on Air Liquide’s longstanding track record of successfully operating in the US and will benefit from Airgas’ unmatched national presence and its more than 1 million customers in the US, as well as from its leading customer-facing platform including e-commerce and telesales capabilities. The combined entity will be able to better serve customers with the most advanced multi-distribution networks in the US and more competitive product offerings thanks to an integrated upstream-downstream model.

The acquisition will reinforce Air Liquide’s global leadership position, increasing Gas and Services sales by around +30 percent. Upon completion of the acquisition, the combined company will be the leader in North America, complementing number one positions in Europe, Africa/Middle East and Asia-Pacific. It will also be number one in Industrial Merchant and Large Industries, and co-number one in Electronics, worldwide.

The combined company will continue to implement an innovation strategy that combines scientific expertise, industry-leading technology and customer insight to bring new products and services to market. It will also improve existing offerings and open new markets, in particular by leveraging digital technologies. In addition, this combination will create new opportunities for employees as part of a leading global organization that is ideally positioned for growth.

Financial Benefits

Air Liquide’s acquisition of Airgas represents significant value for shareholders of both companies. Upon completion, Airgas shareholders will receive immediate and substantial cash value for their shares.

Air Liquide’s management has a proven track record of executing and integrating acquisitions. The transaction is expected to be accretive from year one. Air Liquide plans to realize more than $300 million of pre-tax cost, efficiency and volume synergies; the majority within two to three years. The company’s objective is to maintain its S&P ‘A-/A’ credit rating. Air Liquide has committed bridge financing for the transaction and intends to refinance through a capital increase in the range of €3 billion to €4 billion, and a combination of US dollar and Euro long-term bonds.

Timing and Conditions

The transaction is subject to Airgas shareholders’ approval, receipt of necessary antitrust and other regulatory approvals and other customary conditions and provisions. The two parties wish to proceed swiftly.

Board Approvals and Process

The transaction has been unanimously approved by each of Airgas’ and Air Liquide’s boards of directors, including Executive Chairman of Airgas Peter McCausland who is a significant shareholder, and an ad hoc committee of the Air Liquide board was established to participate in the process that led to the agreement between Airgas and Air Liquide.

Barclays Bank Plc and BNP Paribas are acting as financial advisors to Air Liquide, and also as underwriters of the bridge financing. Cleary Gottlieb Steen & Hamilton LLP and Bredin Prat are acting as legal advisors to Air Liquide.

Goldman Sachs and Bank of America Merrill Lynch are acting as financial advisors to Airgas and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Airgas.