Air Products withdraws offer for Airgas

Air Products has dropped its $70 ($43) per share purchase offer for fellow gas supplier Airgas, bringing to a close a year-long battle between the two companies.

The Airgas board consistently opposed the $5.9 billion offer, which it said undervalued the company, and the debate ended up in the US courts. There have been plenty of twists and turns along the way, but broadly Air Products accused Airgas of using well-known ploys – so-called poison pill tactics – to unfairly prevent shareholders from moving forward on the offer. And in the most recent development the Delaware Chancery Court in the US ruled in favour of Airgas, so Air Products has pulled out.

‘We believe the Airgas Board of Directors has done a great disservice to Airgas shareholders by never allowing them to decide for themselves whether they want to accept our $70 per share all cash offer,’ Air Products chief executive John McGlade said. ‘It is abundantly clear that the Airgas Board is thoroughly entrenched in its position, so we have decided to withdraw our offer and move on.’

In February 2010, Air Products launched its all cash bid with a $60 per share offer. The company had previously failed to woo the Airgas board with an all stock offer in October 2009 and, later, a stock and cash offer. It raised the offer several times: to $63.5 per share in July; to $65 per share in September; and to $70 per share in December 2010, a move it described as its ‘best and final offer’. The $70 per share offer was rejected by the Airgas board, which said $78 per share or higher would be fair.

The deal would have created the largest industrial gas supplier in North America and reunited Air Products with the packaged gas operations it sold to Airgas in 2002 for $236 million. The combined company would have had annual sales of around $12.5 billion.

Business news media outlets have called this a landmark case because of the wider implications for mergers and acquisitions in the US.

Clariant to buy Süd-Chemie in €2 billion deal

And there’s more big news. Clariant has agreed to buy almost all – 95 per cent – of German speciality chemical company Süd-Chemie.

Under the terms of the agreement, One Equity Partners (OEP) will sell its majority interest of just over 50 per cent for €121 per share. Meanwhile, while the ‘traditional shareholders’, a group of long-standing investors, will receive 8.84 shares in Clariant for each of their Süd-Chemie shares. Clariant says the total value of the transaction is €2 billion.

Süd-Chemie generated €1.2 billion in 2010 sales and employs 6500 staff in 60 countries. Clariant says that Süd-Chemie pipeline products, such as materials for lithium ion batteries and catalysts for the production of bioethanol from non-crop sources, provide ‘substantial growth potential’.

Andrew Turley

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