Air Products bids for China’s largest industrial gas maker

Bloomberg

Air Products & Chemicals Inc. made an offer to buy China’s biggest producer of industrial gases as it seeks to compete with rivals such as Praxair Inc. in an industry marked by a wave of consolidation. The Allentown, Penn- sylvania-based maker of industrial and atmospheric gases said in a statement on Monday that it expressed preliminary, non-binding interest in acquiring all outstanding shares of Yingde Gases Group Co., subject to conditions.
The news sent shares of Yingde — which had been suspended starting Dec. 28 — up 16 percent to HK$3.34 in Hong Kong trading, giving the target a market value of HK$6.3 billion ($812 million). That was the biggest gain since Dec. 7, 2015. A deal would help Air Products to leapfrog rivals in China, where Praxair has at least 22 wholly owned units and 10 joint ventures. An acquisition would also help Air Products respond to competition globally from its bigger rival, which last month agreed to buy Germany’s Linde AG to create world’s largest supplier of industrial gases.

MARKET VALUE
Air Products hasn’t yet reached an agreement with Yingde and there’s no certainty a deal will be concluded, the US company said in the statement. The US firm, with a market value of $31.4 billion, had sales of about $7.5 billion from continuing operations in 2016, according to the statement.
Yingde Gases, which supplies to producers of alloys, electronics and chemicals, is in the midst of a boardroom tussle as a Cayman Islands court in December ordered the company to stop a share placement following a filing by two shareholders. The gas maker had planned to raise about HK$1.2 billion selling new shares to Originwater Hong Kong Environmental Protection Co. The board of Yingde will meet on Tuesday to decide on expression of interest. The offer for Yingde follows a string of deals triggered by French rival Air Liquide SA’s takeover last year of Airgas Inc. for $13 billion including debt.