The extensive US divestment package announced by Air Liquide in conjunction with its acquisition of Airgas has officially been cleared by the US Federal Trade Commission (FTC).
It has been confirmed that fellow Tier One corporation Matheson Tri-Gas will acquire no less than 29 facilities in the $781m transaction, as originally proposed on 24th June 2016.
As a result, the divestitures complete the majority of the asset sales required by the FTC in connection with Air Liquide’s $13.4bn takeover of Airgas, which became official as of 23rd May, 2016.
In the multi-million-dollar deal, MATHESON will procure 18 air separation units (ASUs) in 16 locations, four carbon dioxide (CO2) production facilities, two dry ice production facilities, two nitrous oxide (NOx) plants and three Airgas retail packaged welding gas stores in Alaska.
Under the terms of the purchase agreement, MATHESON has therefore acquired production facilities, equipment, inventory, distribution assets and customer contracts, as well as hiring employees related to the divested resources.
Air Liquide confirmed that its combined company sales would be reduced by approximately $270m annually in divesting these assets. This divestment package has generated a net gain versus book value of approximately $250m for the company.
Scott Kallman, President and CEO of MATHESON, enthused, “We are pleased to close the acquisition phase and we can now focus entirely on the ongoing business integration of these new assets. Current and future customers will benefit from MATHESON’s additional capacity and coverage.”
“This acquisition clearly supports our vertical integration strategy. Customers and future customers in these geographies will have access to our full product line of cylinder gases, bulk liquid, dry ice, related equipment and service, and the value this offering can provide to their businesses.”
“It represents the largest acquisition in the TNSC group history and extends our plant network throughout the US”
Yujiro Ichihara, President and CEO of Taiyo Nippon Sanso Corporation (TNSC)
Yujiro Ichihara, President and CEO of Taiyo Nippon Sanso Corporation (TNSC), parent company of MATHESON, underlined, “This acquisition is consistent with TNSC’s focused strategy to expand our presence in the US market. It represents the largest acquisition in the TNSC group history and extends our plant network throughout the US.”
“By enhancing our position in the East and Midwest, we will further solidify MATHESON as a national supplier,” Ichihara concluded.
After taking into account the required divestitures, gasworld Business Intelligence has identified a US market leadership position of just under 28%, currently five percentage points more than fellow Tier One player Praxair, Inc. It valued the US commercial industrial gases market at just under $20bn in 2015, with Air Liquide and Airgas then holding market shares of 13% and 16%, respectively.
Completion of the transaction is expected to occur in the third quarter of 2016, subject to FTC approval and customary closing conditions.