Air Liquide to acquire Airgas for USD13.4 billion

MOSCOW (MRC) -- Air Liquide says it has agreed to acquire Airgas for USD13.4 billion, in a deal that would create one of the largest industrial gases firms in the United States, said the company on its site.

The purchase price, which values Airgas at USD143/share, represents a premium of 50.6% on Airgas' average share price over the past month. Airgas’ market capitalization is around USD8 billion, and the company generated about USD5.30 billion in sales, USD368.1 million in net earnings, and USD641.3 million in operating income for its most recent fiscal year.

Shares in Airgas spiked this morning immediately after a Bloomberg report appeared speculating that the deal was imminent. Airgas shares jumped from about USD106/share earlier this morning to about USD114/share after noon US eastern time, and halted trading shortly thereafter as a result of the report. Airgas is currently trading at around USD137/share.

The deal increases Air Liquide's presence in the United States, a market CEO Benoit Potier called "resilient." The acquisition will also increase Air Liquide's sales in gases and services by about 30%, the company says. It is expected to be accretive to Air Liquide's earnings within a year of closing. The timing of the close has not been announced, but "the two parties with to proceed swiftly," according to Air Liquide.

Air Liquide will fund the acquisition with a refinancing, comprising of a EUR3-4 billion (USD3.2-4.25 billion) capital increase, as well as US dollar and euro-denominated long-term bonds. The company also has committed bridge financing for the acquisition. Cost savings from the deal are expected to total about USD300 million/year, pre-tax, within the first three years.

Airgas "always had a desire to expand our reach beyond U.S. border, but product sourcing was a significant hurdle," executive chairman Peter McCausland said in a letter to employees today. Air Liquide is the second-largest global industrial gases producer by sales, after Germany's Linde. The acquisition significantly expands Air Liquide's business in the packaged gases market in the United States, where Airgas has the top position with a 25% market share. Air Liquide had about USD4.15 billion in sales in the Americas in 2014, but is much smaller than Airgas in packaged gases in the US.

Many European chemical companies have come to view North America as a growth market because of its low-cost energy, strong manufacturing sector, and steady, if still slow, economic growth. Over the summer, Solvay agreed to acquire US-based Cytec for USD6.4 billion, expanding its presence in North America and in the composites space.

Barclays and BNP Paribas are Air Liquide's financial advisors, while Cleary Gottlieb Steen & Hamilton are its legal advisors. Goldman Sachs and Bank of America Merill Lynch are acting as financial advisors to Airgas, while Wachtell, Lipton, Rosen & Katz is Airgas' legal advisor. Barclays and BNP Paribas are also underwriting the bridge financing.

Airgas was the subject of a USD70/share hostile bid by Air Products in 2010 and early 2011.

As MRC wrote before, Air Liquide signed an agreement with Russian producer RusVinyl to supply oxygen, nitrogen and compressed dry air to its new polyvinyl chloride (PVC) plant in Kstovo, Russia. Air Liquide would invest, build and operate a new air separation unit with a capacity of more than 350 tonnes/day of oxygen in Kstovo, in the region of Nizhegorodskaya oblast.

L'Air Liquide S.A., or Air Liquide, is a French multinational company which supplies industrial gases and services to various industries including medical, chemical and electronic manufacturers.

MRC

MOSCOW (MRC) -- Performance materials supplier Ferro Corp. of Mayfield Heights said it has completed the acquisition of Egypt-based tile coatings manufacturer Al Salomi for Frit and Glazes for about USD36 million, including the assumption of debt, said Crainscleveland.

The company had announced the deal on Sept. 3.

Ferro described Al Salomi as one of the leading manufacturers of frits and glazes in the Middle East and North Africa. Al Salomi’s 5,600-square-meter plant in Suez, Egypt, "is expected to be one of Ferro’s lowest-cost frit production sites," Ferro said in a news release.

Current production capacity is 55,000 metric tons per year. An additional two lines, or 12,000 metric tons per year, of new tile coatings capacity is under construction and due to be operational in early 2016, Ferro said. The plant, which will be Ferro’s second frit production facility in Egypt, includes land and infrastructure assets to support expected growth, according to the release.

Ferro said it expects the transaction to add to adjusted diluted earnings by 3 cents to 6 cents in 2016.

Peter Thomas, chairman, president and CEO of Ferro, said the deal "will provide much-needed production capacity, as we have been running at or near capacity levels at our existing plants in Spain and Egypt for some time."

He added, "Despite current weakness, the (Middle East and North Africa) region remains a very attractive, growing market for tile and porcelain enamel products. This acquisition, combined with our investments in Turkey, strengthens our position as a market leader."

As MRC informed earlier, A. Schulman, Inc. in 2014 announced that it had completed its acquisition of a selected majority of the assets of the Specialty Plastics business segment from Ferro Corporation for USD91 million in cash.

Ferro Corporation is a leading global supplier of technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials. Ferro products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. Headquartered in Mayfield Heights, Ohio, the Company has approximately 4,710 employees globally and reported 2014 sales of USD1.1 billion.
MRC

MOSCOW (MRC) -- The board of directors of Axiall Corporation appointed Timothy Mann, Jr. as the company’s president and chief executive officer, a position to which he was named on an interim basis on July 6, 2015. In addition, Mr. Mann was named to the board of directors, said Investors.

"The board completed its CEO search process and is pleased to select Tim Mann to be the president and chief executive to lead Axiall Corporation," said Axiall Board Chairman Mark Noetzel. "Tim has energized the employees and has renewed our focus on Axiall’s primary strategic initiatives. He has demonstrated to the board the right experience and capabilities to lead Axiall as we enhance the company’s competitive position to drive shareholder value."

Axiall President and CEO Mann said, "We are strengthening the company’s competitive position through improved operational reliability and a focus on cost competitiveness. Further, we continue to evaluate the alternatives for the entire portfolio of businesses and assets. I want to thank our employees for their dedication to safe operations and customer service."

Also, the Axiall Corporation board of directors declared a regular quarterly dividend of 16 cents per share of common stock. The dividend is payable Jan. 11, 2016, to shareholders of record at the close of business on Dec. 23, 2015.

As MRC informed earlier, Ineos Americas announced that it has acquired the aromatics business from Axiall Corp., a leading integrated North American chlorvinyl and aromatics manufacturer. Ineos paid USD52.4 million at closing with an additional USD10.5 million payable after closing upon satisfaction of certain conditions. The transaction became effective at the end of 30 September 2015.

Headquartered in Atlanta, Georgia, Axiall produces specialty chemicals and building products.

MRC

MOSCOW (MRC) -- Valero shuts FCCU at Port Arthur refinery in Texas following fire, said Reuters.

The fire stemmed from a hole in the FCCU's fractionator, Reuters reported, citing company sources. The time needed to repair and return the unit to normal operations was unknown.

A gasoline-producing fluid catalytic cracking unit (FCCU) was not running on Monday after a fire at Valero's 335,000-bpd refinery in Port Arthur, Texas, according to a report from news agency Reuters.

The fire stemmed from a hole in the FCCU's fractionator, Reuters reported, citing company sources.

The time needed to repair and return the unit to normal operations was unknown on Monday, accourding to Reuters' sources.

Valero did not respond to a request for comment.

As it was written earlier, in February 2015, Valero Energy Partners LP approved the partnership's acquisition of certain businesses from subsidiaries of Valero Energy Corporation. In the transaction, the partnership will receive the outstanding membership interests in Valero Partners Houston, LLC and Valero Partners Louisiana, LLC for total consideration of about USD671 mln.

Valero Energy Corporation is a Fortune 500 international manufacturer and a marketer of transportation fuels, other petrochemical products, and power. It is based in San Antonio, Texas, United States. The company owns and operates 16 refineries throughout the United States, Canada, United Kingdom, and the Caribbean with a combined throughput capacity of approximately 3 million barrels (480,000 m3) per day, 10 ethanol plants with a combined production capacity of 1.2 billion US gallons (4,500,000 m3) per year, and a 50 megawatt wind farm.
MRC

MOSCOW (MRC) -- Teknor Apex has expanded its "polymer-neutral" product by developing styrenic TPEs with alternative cost and performance profiles to those of TPVs in automotive exterior application, said the producer on its site.

The Sarlink ME-2200 series exhibit higher flow than comparable TPVs, enabling molders of exterior components such as gaskets, seals, and trim to process complex, intricate designs while shortening cycles through reduced packing and cooling time. In applications where TPV compounds are over-engineered, these compounds can provide a cost savings while still meeting the performance requirements of the part. Like TPVs, the compounds are less dense than EPDM and PVC, yielding weight savings of up to 15 and 23 %, respectively.

The TPEs are available in hardnesses from 65 Shore A to 40 Shore D. They are said to offer excellent UV stability, provide good flexibility over a wide temperature range, and yield a Class A surface appearance. The compounds are readily colored and, unlike many TPVs, do not require pre-drying prior to moulding. All compounds in the series are available worldwide in both black and natural formulations.

"Sarlink ME-2200 Series TPEs are already in commercial use for static seals, cowl vent seals, and mirror gaskets," said Jeffrey E. Dickerhoof, senior marketing and sales manager for the Thermoplastic Elastomer Division of Teknor Apex. "These new products are the latest examples of a Teknor Apex program to offer a wide-ranging, polymer-neutral portfolio, one that enables us to recommend a compound not because it happens to be what we make but because it is exactly the right material for a customer’s application."

As MRC informed previously, in 2013, Teknor Apex Company introduced a new rigid PVC compound with a specially developed UV-blocking formulation, which provides clarity for photobioreactor and other outdoor tubing, along with high gloss and toughness for weatherable profile applications.

Teknor Apex is one of the world's leading custom compounders headquartered in Pawtucket, Rhode Island, USA. The company produces PA compounds in the UK, the U.S.A., and Singapore. Teknor Apex is one of the world's leaders of specialty PVC compounds which are used in a wide range of applications from wire and cable to automotive, medical, consumer and industrial products. The company also produces thermoplastic elastomers, nylon, bioplastics, chemicals, specialty compounds.
MRC