The Iberian industrial gas market, incorporating Portugal and Spain, was valued at just over $1.4bn in 2015. The region has experienced growth of 1.4% p.a. over the course of the last decade (2005-2015).
The current market leaders in Iberia are Air Liquide, with the company commanding the largest share of revenues in both Spain and Portugal. This equates to market shares of 44% and 36% in Portugal and Spain respectively.
There are a number of Tier One companies present in Spain, with all companies, except Messer, posting revenues in excess of $100m. The next largest company, after Air Liquide, in Spain is Praxair. Air Products currently command just under 25% of revenue in the country through its wholly owned subsidiary Carburos Metallicos. Linde are the last company with revenues in excess of $100m in the Spanish market.
The industrial gas sector in Portugal is dominated by a handful of the major international companies. Air Products GASIN accounted for just over a fifth of revenues in the country, with Linde commanding a slightly smaller market share. Messer and Praxair command more modest revenue streams in Portugal, with both company market shares being less than 10%.
Our forecast models suggest that both Spain and Portugal are in line to experience relatively strong growth over the course of the next five years. Spain should experience growth of 1.5% p.a. in a low scenario to 2.4% p.a. in a high scenario, with Portugal growth estimated at 1.1% in a low scenario to 3.3% in a high scenario.
As Praxair and Linde currently hold reasonable market shares in both Spain and Portugal, it is likely that the potential merger will be scrutinised. However, if the companies were to combine the create a new entity, this new company would hold shares of under 40% in both countries. These new market shares could potentially be enough to satisfy the European Commission.
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