What an interesting time to be in the industrial gases business, and particularly so in the Americas region.
This news of Corning Painter’s departure from Air Products this week is the second big executive departure to be disclosed in as many months in the US.
It may have slipped under the radar a little, but Praxair also filed a high-level departure with the US SEC of late, related to former Executive Vice-President Scott Telesz. The filing, dated 6th April (2018), explained that Telesz’s time with Praxair ended on 1st May.
These changes also come at a time when the market is about to undergo potentially huge change, for the second time in the last three years.
Many thought Air Liquide’s $13.4bn acquisition of Airgas in 2016 was the final flourish in mega M&A in the industry, a deal that changed the face of the leadership of the industry in terms of market share and created a new leader altogether in the North American market.
Then came the dramatic news last summer of a prospective merger of equals between Praxair, Inc. and Linde AG – potentially changing the game yet again, but on an even bigger scale. The $70bn merger of Praxair and Linde will lead to a combined entity – Linde plc – that usurps Air Liquide as the leading force in the global gases business.
gasworld Business Intelligence estimates a combined market share of 33% pre-divestment. With that inevitably comes a sizeable divestment package, creating opportunities for other players to emerge or escalate in prominence.
Divestments are mandatory on any deal of this magnitude in the gases industry, and we saw as much with the Air Liquide-Airgas acquisition last year as MATHESON and Aspen Air arose as the two lead protagonists in picking up assets sold-off as mandated by anti-trust regulations. The divestitures in any merger of Praxair-Linde may be to the tune of around $1bn worth of business in the US alone – over three times that of the Air Liquide-Airgas divestment package – with the relevant anti-trust authorities picking through the complexities of the deal with a fine-tooth comb as we speak.
Whatever the future holds for Painter or Telesz, or any other protagonists in the upper echelons of the industry, and whatever emerges from the ongoing Praxair-Linde merger, it’s an intriguing time for the leadership of the Americas gases business. By the end of this year, we may just have an inkling as to how that will shape up.