The North American industrial gas market will be all the stronger for Air Liquide’s merger with Airgas, Inc., says the latter’s new Vice-Chairman of the Board, Michael J. Graff.
Air Liquide completed the $13.4bn acquisition of Airgas on Monday, in a deal that all at once creates a new leader in the region and affirms its long-term growth potential.
North America is already home to what is comfortably the largest of the regional industrial gas markets, valued at just under $20bn in 2014 by gasworld Business Intelligence, and Air Liquide only sees this position strengthening in the future.
Asked if the capture of Airgas demonstrates optimism for the long-term future of the market, Graff – member of the Air Liquide Group’s Executive Committee, Executive VP of the Houston-Americas Hub and now Vice-Chairman of the Board of Airgas – affirmed to gasworld, “It does. A greater presence in the resilient US market will ideally position Air Liquide for future growth. The US market is expected to deliver 20-25% of the global mid-term future growth in industrial gases.”
Graff believes the merger will enable the combined entity to better serve North American customers, echoing the earlier sentiments of Air Liquide Chairman and CEO Benoit Potier that there is ‘strong industrial and market logic’ to the acquisition. He explained, “There is strong industrial and market logic to this acquisition, which positions Air Liquide ideally for future growth and value creation. The two businesses are highly complementary, and the transaction extends Air Liquide’s customer base through a unique, multi-channel distribution network and a nationwide presence in the US.”
“The combined entity will be able to better serve customers with the most advanced multi-distribution network in the US, more competitive offers thanks to an upstream-downstream integration model, and more innovative products and solutions.”
Value and vision
Graff explained that Air Liquide expects to make relatively rapid progress in the process of integration and, therefore, in realising the fundamental value creation that the merger brings – especially given the track-record that the two companies boast in executing acquisitions.
“Both Air Liquide and Airgas have significant experience and a proven track-record of executing and integrating acquisitions. Furthermore, Airgas’s business operations are well within our core focus area as the leading player in the industrial gases sector and the vast majority of their operations are limited to one country,” he said, adding, “We are well prepared for the integration process, and expect to make significant progress in the coming months.”
“Both Air Liquide and Airgas have significant experience and a proven track-record of executing and integrating acquisitions…We are well prepared for the integration process, and expect to make significant progress in the coming months”
Integration will not include any major rebranding efforts, Graff confirmed to gasworld, with Airgas continuing to operate in the US under its own name as an Air Liquide company. The Airgas vision that founder and retiring Executive Chairman Peter McCausland has always so lauded will also remain unchanged; this has clearly always been imperative for McCausland, who had spoken so positively of Air Liquide’s heritage and long-term vision from the day the deal was first proposed.
So what is Air Liquide’s vision for the company in North America, and how does this compare with that of Airgas? Graff explained, “Peter McCausland grew Airgas into one of the premier industrial gas companies in the country with a clear focus on the customer, and Airgas has demonstrated over many years that the packaged gas business in the US is a growth market.”
“The Air Liquide strategy of delivering profitable growth over the long-term remains unchanged. The acquisition of Airgas contributes to this growth strategy, which over the past decade has been focused on geographic expansion as well as innovation in promising markets. As growth rates in developing and advanced economies are converging, a greater presence in the resilient US market, the largest for industrial gases worldwide, will ideally position Air Liquide for future growth.”
In terms of Graff’s own vision and what he hopes to bring to the top table in North America, he enthused, “In my role as Vice-Chairman of the Board of Airgas, I look forward to combining my experience as Executive Committee member of Air Liquide Group and Executive Vice-President of Air Liquide’s Houston- Americas Hub, with my familiarity of the US and global industrial gases markets and the wide range of customers and patients served, to help grow the combined company throughout the US and the world.”