Air Liquide Unveils Transformation Plan after Airgas Takeover
Air Liquide has unveiled its transformation strategy for the next four years. Chairman and CEO Benoît Potier revealed the details of the company’s NEOS 2016-2020 program during a capital markets day, held in London on Jul. 6.
The move follows the French industrial gases producer’s $13.4 billion takeover of US competitor Airgas in May of this year, creating the world’s largest industrial gases distributor. The takeover also increased Air Liquide’s gas and services sales by more than 30% and strengthened its global leadership by rebalancing its European and American positions, particularly in the US.
“The group has acquired a new dimension following the acquisition of Airgas and thus enters a new phase of its development. Our strategy for profitable growth over the long-term is that of a customer-centric transformation,” Potier commented.
Under the plan, Air Liquide is aiming for a rise in revenues at a compound annual growth rate (CAGR) of 6-8%, annualized efficiency gains of more than €300 million and synergies related to the Airgas acquisition totaling more than $300 million. The company is also targeting a return on capital employed (ROCE) of more than 10% after five to six years.
Selling Some US Assets to Matheson
In late June, Air Liquide has announced plans to sell a number of its US assets to Matheson Tri-Gas, a subsidiary of Japan’s Taiyo Nippon Sanso. The sale is designed to satisfy conditions imposed on the French company by the US Federal Trade Commission in connection with its takeover of Airgas.
The transaction includes 18 air separation units in 16 locations, two nitrous oxide production facilities and four liquid carbon dioxide production facilities in four states, including two dry ice production facilities. Additionally, it includes three Airgas retail packaged welding gas stores in the state of Alaska.
Air Liquide said it is currently in negotiations to sell two facilities in the state of Iowa that produce both liquid carbon dioxide and dry ice. This, it said, is the last step in filling the FTC conditions. Altogether the assets being divested have annual sales of around $270 million but terms of any of the transactions were not disclosed. (dw, eb, mr)
