Air Liquide completes acquisition of Airgas | Air Liquide (2024)

• Acquisition’s strong industrial and market logic ideally positions company for future growth and long-term value creation
• More than $300million in synergies identified, with the majority to be achieved within the next two to three years
• AirLiquide strengthens its global leadership in the industrial gas industry

Paris, France, and Radnor (Pennsylvania), USA – 23May 2016 – AirLiquide (Euronext Paris: AI), world leader in gases, technologies and services for Industry and Health, today announced that it has completed the acquisition of Airgas, Inc., one of the leading suppliers of industrial gases and associated products and services in the U.S. Globally, the combined businesses will generate annual sales of more than €20billion (more than $22billion at current exchange rates¹), employ approximately 68,000people around the world, and serve well over three million customers and patients.

Benoît Potier, Chairman and CEO of AirLiquide, said: “We are very pleased to have successfully closed our acquisition of Airgas, which will contribute to our strategy of profitable growth over the long term. There is strong industrial and market logic to this acquisition, which ideally positions AirLiquide for future growth. The two businesses are highly complementary, and the transaction extends our customer base through a unique, multi-channel distribution network and a nationwide presence in the U.S. Since founding Airgas some 30years ago, Peter McCausland has successfully grown the business into one of the premier industrial gas companies in the U.S., and I would like to thank him for his leadership, dedication and achievements. This transaction represents significant value potential for all AirLiquide stakeholders, and it is an exciting day for the Group as we welcome our Airgas colleagues and together begin a new chapter in our history.”

Peter McCausland, Executive Chairman of Airgas, said: “Today’s history-making transaction is the culmination of more than 30years of growth and value that we have steadfastly delivered to Airgas shareholders – it is a proud moment. The future is very bright for Airgas’ more than one million customers and our talented employees as we join AirLiquide’s unrivalled global footprint and strength in technology and innovation, while remaining committed to Airgas’ product offering, service model, and entrepreneurial culture. Thank you to our customers, shareholders, and associates for believing in the Airgas vision, just as I have, for all of these years.”

Under the terms of the merger agreement, first announced and unanimously approved by each company's Board of Directors in November 2015, Airgas shareholders receive $143 in cash for each share of common stock of Airgas. In connection with the merger, the Airgas common stock has been delisted from the New York Stock Exchange. Airgas will operate as a subsidiary of AirLiquide within the company’s U.S. operations and, commercially, will go to market as Airgas, an AirLiquide company.

Strategic Rationale:

• There is strong industrial and market logic to this acquisition, which ideally positions the Group for future growth and long term value creation. It allows AirLiquide to expand in the U.S., the largest global market for industrial gases, and extends AirLiquide’s customer base by more than one million customers. The transaction will also create efficiencies in production and supply chain thanks to the complementary nature of the two businesses, and allows for potential volume growth using Airgas’ footprint to accelerate the deployment of AirLiquide’s new offerings and technologies. The acquisition also brings with it the most advanced multi-channel distribution network in the U.S., including e-commerce and telesales capabilities.
• The transaction is expected to generate significant synergies. Through active preparation work prior to the closing, more than $300million of pre-tax industrial, administrative and volume growth synergies have been identified, the majority of which are targeted for delivery within the next two to three years, and are structured in detailed work plans.
• The combination represents significant value potential for all AirLiquide stakeholders, including shareholders, customers, and employees. The transaction will be accretive from year one of ownership. AirLiquide and Airgas together will deliver greater value, service and innovation to customers in North America and around the world by allowing AirLiquide to offer its leading production and innovation capabilities to a broader customer base. This combination also creates new opportunities for employees as part of a leading global organization that is ideally positioned for growth.
• The combination strengthens AirLiquide’s global leadership in the industrial gas business. AirLiquide becomes the leader in North America, complementing number one positions in Europe, Middle East/Africa and Asia-Pacific. It will also be number one in Industrial Merchant, Large Industries and Electronics, and one of the key players in Healthcare.

Leadership Announcements:

• Peter McCausland, Executive Chairman of the Board of Airgas, retired upon closing of the transaction.
• Pierre Dufour, Senior Executive Vice-President and Board Director of AirLiquide, has been appointed Chairman of the Board of Airgas.
• Michael Graff, Member of the AirLiquide Group’s Executive Committee and Executive Vice-President of the Houston Hub, has been appointed Vice Chairman of the Board of Airgas.
• Pascal Vinet, Member of the AirLiquide Group’s Executive Committee, will be appointed CEO of Airgas, after a brief, post-closing transition phase. During this transition phase, Michael Molinini will continue with his current responsibilities, serving as Interim CEO of Airgas, and he will retire later this year.
• Andrew Cichocki has been promoted to the role of Chief Operating Officer of Airgas, where his responsibilities will include direct oversight of the combined companies’ Industrial Merchant and Healthcare activities in the U.S., which are being consolidated under Airgas.

Next Steps:

• AirLiquide will pursue and finalize sales of certain assets of the combined company in line with the divestiture process described in the U.S. Federal Trade Commission’s press release on 13May 2016. The contemplated divestitures are in line with what AirLiquide was expecting prior to the transaction, and they will reduce the combined company’s sales by approximately $270million annually.
• AirLiquide received bridge financing for the transaction and refinancing of the acquisition will involve a capital increase in the range of €3billion to €3.5billion, together with a combination of U.S. dollar and Euro long-term bonds. AirLiquide is contemplating a capital increase with preferential subscription rights for shareholders at the end of Q32016 or the beginning of Q42016, subject to market conditions.
• AirLiquide management will hold a Capital Markets Day for investors and analysts on 6July 2016 in London, where the new Group mid-term plan will be presented.

Barclays Bank Plc and BNP Paribas are acting as financial advisors to AirLiquide. Cleary Gottlieb Steen & Hamilton LLP and Bredin Prat are acting as the primary legal advisors to AirLiquide.

Goldman Sachs and Bank of America Merrill Lynch are acting as financial advisors to Airgas and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Airgas.

¹ Calculated as of Friday, 20May 2016.

Find the milestones regarding AirLiquide's acquisition of Airgas.