Airgas Sues Carlyle over Trade Secrets Theft

US industrial gases producer Airgas – since 2016 part of French gases giant Air Liquide (AL) – is suing private equity investor Carlyle and a former executive of AL in a US federal court for allegedly stealing trade secrets.

Specifically, said British newspaper Financial Times (FT), Carlyle is accused of offering a bribe to Leslie Graff, formerly Air Liquide’s vice president of mergers and acquisitions in the Americas and now employed by Carlyle – to gain an advantage in buying up assets merging gas producers Linde and Praxair must divest to gain regulatory approval.

Quoting “a person familiar with the situation,” the FT said Carlyle was interested in acquiring assets worth roughly $3 billion that rival buyout firm CVC Capital Partners and German gases producer Messer also were seeking to picking up.

The paper’s source said the buyout specialist offered “significant” monthly payments to Graff, along with a large bonus if it succeeded in buying the assets. The purported plan is said to have come to light after the executive used his company’s office equipment to email a scanned copy of his agreement with Carlyle.

Graff resigned after signing with Carlyle in April, the lawsuit says. Airgas contends that he downloaded “a trove of competitively sensitive information” to two USB thumb drives before leaving and that the private equity group provided “a direct financial incentive” for him to breach his duties as an employee.

To obtain regulatory approval for their €70 billion merger, Linde and Praxair have been seeking to divest some of their US and European assets. In the lawsuit, the FT said Airgas asked the court to block Carlyle from “engaging in competition, or assisting any other party to compete” with its business; however, it was not clear whether any injunction granted would force it to withdraw its bid.

Air Liquide told the newspaper it would look at opportunities that could arise from the Linde-Praxair divestitures “on a case-by-case basis and in accordance with the group's current presence in the countries concerned.”

Preliminary information about the assets to be divested was sent to prospective buyers in the second half of February, the same month the European Commission began its in-depth review of the proposed Linde-Praxair merger. A decision is expected by Jul. 18.

 Among potential bidders for the businesses that could be up for grabs, Air Liquide, Air Products & Chemicals and Matheson Tri-Gas – both of the US – along with Messer have been identified, in addition to private equity investors KKR, Carlyle and CVC. The latter was believed to be working with Messer.

Citing “people with knowledge of the matter,” the news agency Bloomberg said in March that due to a wider scope the divestments could fetch about $8 billion, far more than earlier estimates.