Amidst of one of the largest mergers in the industrial gases business to date, the ‘little brother’ is racing to make gains where it can. In the second week of 2017, Air Products announced its intent to purchase the outstanding shares of Yingde Gases.
However, the bid comes at the same time as the company is embroiled in a feud that started in November 2016, between two groups of current and deposed Directors. This of course will not help a smooth transition in ownership of the company, if the acquisition goes ahead.
The onsite factor
Yindge is known for its large onsite presence in China, and serves many steel and chemical clients directly with air gases and hydrogen – steel clients alone account for 70% of Yingde’s onsite oxygen capacity. The downside of this is that this client base can be very volatile to international events and pressures. Anti-dumping rules are causing many Chinese manufacturers to move their production bases to other areas in Asia. Due to Yingde’s presence being limited to China, there is a chance that the company will lose out to the other majors who have established businesses across the region.
... to continue reading you must be subscribed
