Returning to the Americas market after a 14-year absence will represent the major milestone in the company’s 120-year history, says owner and CEO, Stefan Messer.
Securing agreement to acquire Linde assets in the US, Brazil, Colombia and Canada, announced on 16th July, is also ‘certainly the biggest decision I have ever made in my life’ he told gasworld.
Messer was interrupting his holiday to give gasworld one of the first full interviews since the group was announced as the purchaser – together with CVC Capital Partners – of substantially all of Linde’s US bulk business , and its business in Brazil, Canada and Colombia.
The business to be sold generated annual sales of approximately $1.7bn (€1.4bn) and an EBITDA of just over $360m (€305m) in 2017.
The scale of the group’s acquisitions could have been even bigger, such was its ambition for the ‘interesting assets’ on offer, Messer revealed. “The consequence of the Linde Praxair merger is that they have to sell very interesting assets in Europe and the Americas in order to receive the final approval from the cartel authorities,” he said.
“We were interested in all of them because some of the plants in Europe are former Messer activities like in Germany and Italy. Unfortunately, the European assets will now go to Taiyo Nippon Sanso.”
The Messer Group is, however, set to return to the important American continent for the first time in 14 years and complete the geographic footprint of the Messer Group again, pending completion of the proposed business combination of Linde and Praxair and the necessary regulatory approvals.
Just as the mega merger of Praxair, Inc. and Linde AG essentially sees the new entity revisit roots dating back to World War I when Linde AG was forced to exit the US gases market and those gas assets became what we know as Praxair, Inc. so many decades later (1992), here with Messer there is a certain sense of symmetry or romanticism to its re-entering of the Americas.
After its formation in 1898 by Adolf Messer, the company went through decades of growth, consolidation and market development, including growth in Europe and North America, and enjoyed a strong global footprint at the time of its centenary in 1998.
“We were interested in all of them because some of the plants in Europe are former Messer activities like in Germany and Italy…”
But a period of investor instability and restructuring ensued in the years that followed, which eventually saw two-thirds of the company sold off – with Air Liquide picking up Messer’s industrial gas operations in the UK, US and Germany in 2004.
Simultaneously, the Messer family, through its holding company Messer Industrie GmbH (MIG), announced that it would acquire the remaining shares in the old Messer Group, a transaction that was completed in May 2004 and not only saw Stefan Messer (Adolf Messer’s grandson) restore the group’s status as a family-owned business, but also marked the birth of the Messer Group as we know it today.
Now, with the pending acquisition of these Linde assets in the Americas region, the Messer Group as we know it today resembles a little more of the Messer Group that we knew decades ago.
Messer sees this as a big step forward for the company and, should it all proceed as planned, an opportunity that he believes will be the major milestone of the group’s 120-year history.
“This acquisition, which still needs the approval of the Federal Trade Commission, will give us the opportunity to return to the important American continent after 14 years of absence when we sold MG Industries to Air Liquide. This will be a big step forward for our company,” he said.
“This is certainly the biggest decision I have ever made in my life and it will be the major milestone of our 120 years company history.”
It’s also an opportunity that the group couldn’t pass up, with Messer seeing it as the last chance to re-establish the Messer Group as a truly global Tier One player.
“It is the last chance for Messer to return with remarkable business opportunities to the important US market,” he said. “If the deal pushes through, the geographic portfolio of Messer will be complete again. We would have activities in the major mature markets of Europe and America, as well as in the fast-growing regions of Asia.”
“It is the last chance for Messer to return with remarkable business opportunities to the important US market…”
With 5,675 employees worldwide, Messer achieved 2017 revenues in excess of €1.2bn. This is actively being built upon this year with the company’s 120th anniversary, a year of celebration for the group – and what better time than to re-establish the group in the industry’s biggest regional market?
Messer enthused, “We celebrate our 120th anniversary the whole year. For example, in June we organised a big open-air concert with the Belgian singer Milow in Bad Soden. Five thousand customers, partners and residents of Bad Soden attended this event. In autumn of this year, we will have a party for all our employees worldwide. In every country we will celebrate our birthday on the same day and will connect to each other by internet.”
“If the pending investment into the Linde assets will finally occur, we have of course another reason to be happy and thankful.”
Another anniversary is not lost on gasworld – that of Messer’s 20th year at the helm of the group. Asked how proud he is of the challenges the company has overcome and the position it now finds itself in, as well as its values of family, sustainability, responsibility and independence, he reflected, “I am very proud of my people and what we have achieved together so far.”
“Today we have strong positions in Europe where we invested a lot during the last 14 years of independence. We also built up a profitable and diversified business in China, which continuous to grow very nicely. Furthermore, we are currently developing new opportunities in the ASEAN countries.”
“Messer is a successful family company with all the important values you mentioned, which are the pillars of our success. We want to differentiate ourselves from our big competitors, which are all listed companies with more short-term interests. Of course, we will wholeheartedly welcome our new colleagues from Linde in the Americas and hope they will be motivated to join us and will get used to our more long-term company values.”
At a time when asset swaps, vast sums of money, and market leadership dynamics are the order of the day, what better message to impart as the Messer Group moves into a new era.
Praxair and Linde continue to aim for completion of their merger in the second half of 2018. The companies are working toward a deadline of 24th October (2018), as dictated by German financial market rules. At the time of writing, the transaction has been given clearance in 16 countries, with final approval in eight countries/regions (EU, US, South Korea, India, China, Brazil, Chile and Argentina) still pending. There is no closing condition attached to Chile and Argentina.