Air Liquide, already the largest industrial gases producer in the world, has taken steps to become even larger, with the planned purchase--for nearly $3.3 billion--of most of the operations of its German competitor Messer Griesheim.
The deal, sure to be closely scrutinized by antitrust authorities in Europe and the U.S., would include Messer's operations in the U.S., Germany, and the U.K. Those units together account for about 70% of Messer's sales. Germany, in particular, will prove a region of concern: The acquired operations, together with Air Liquide's own in the country, will give Air Liquide a more than 40% market share, according to one analysis.
The Messer family will buy out financial investors Goldman Sachs and Allianz Capital Partners, who hold a 67% stake, before making the sale to Air Liquide. Messer will be left with approximately $580 million in annual sales, primarily in the remaining countries in Western and Eastern Europe, in China, and in Peru.
Stefan Messer, designated CEO of Messer Griesheim, says, "With good market positions in Central and Southeastern Europe, as well as in specific market segments in Western Europe, we have a very favorable basis for further profitable growth." He already has expansions planned for the slimmed-down company.
According to Air Liquide, the buy will add nearly $1.3 billion in annual sales to its own total, an estimated $10.3 billion in 2003. The company's chairman, Benoît Potier, is already prepared to sell off some units--as much as 20% of the operations acquired--to secure the approval of antitrust authorities.