Mergers and Acquisitions: A Vital Strategy Followed by the Industrial Gases Business in 2016

2016 has been the year of mergers and acquisitions in the industrial gases market. The global market for industrial gas is heavily consolidated due to the merger and acquisitions of major players like Praxair Inc. and Linde Group (Merger) and the acquisition of Airgas by Air Liquide. Furthermore, Air Liquide’s global market share is likely to rise by about 5% points from 2016, reflecting its takeover of Airgas Inc., a US-based company. The transaction was closed in the second quarter of 2016. From a rating point of view, both Air Liquide and Linde stand out among the four global leaders depicted, due to their larger size and better global representation, while the two US-based producers, Air Products and Praxair, have high market shares at home but comparatively lower ones abroad.

Air Liquide is one of the major players in the industrial gas market with wide range of product offerings dealing in various industries. Its recent acquisition of Airgas has enabled it to expand in the U.S, which is the largest market for industrial gases. Recently, Air Liquide completed the $13bn acquisition of Airgas, Inc. and one more probable industry game-changer might be on the horizon as the year ends, with the resumption of merger discussions amid Praxair, Inc. and The Linde Group. Moreover, in the last few days, these two companies have announced the terms of an agreement in principle. Airgas has been an attractive business for the industrial gas market. The acquisition amid Air Liquide and Airgas, established Air Liquide as the largest player in a North American market.

2016 has been a year of mega M&A in the gases business. There are a number of regional highlights to reflect upon, however, with the US and Asia-Pacific markets the subject of particular focus. Daesung Industrial Gases is the second-largest player in the South Korean market, just behind Tier One multinational Air Products.

This South Korean company’s industrial gases market is allegedly the theme of an auction process that would see the Goldman Sachs Group relinquish its controlling stake in the company. Key merger & acquisition business was also witnessed in various gas markets this year, with dry ice innovator Cold Jet acquiring its fellow dry ice company IceTech in January, which brought together two of the leading players in their field. On a similar note, 2017 is also anticipated to be a similarly game-changing year for the global gases business.