Air Products bids for China gas leader

AIR PRODUCTS has offered to buy Yingde Gases, China’s largest producer of industrial gases, as the sector continues to consolidate.

The US gases giant has confirmed it has submitted a preliminary non-binding offer to Yingde Gases but will not be drawn on any further details, including the value of its bid. Bloomberg reports that Yingde Gases has a market value of around US$814m and net debt of about US$1.45bn.

A note from analysts Seaport Global Holdings said the acquisition of Yingde Gases would strengthen Air Products’ position in a key growth market.

The company primarily produces gas on site for industry as well as delivering by road and pipeline. As of June last year the company had 69 production facilities operating across China. Its primary output is oxygen, nitrogen and argon while its key customers are producing chemicals, metals, electronics and energy.

The deal continues Air Products’ focus on industrial gases following the sale of its performance materials business to Evonik last year for US$3.8bn. The deal would also continue the consolidation of the industrial gases sector.

In December, Linde and Praxair agreed they would merge, creating the world’s largest industrial gases firm, overtaking the tie-up between Air Liquide and Airgas that was approved earlier in 2016. Consolidation among industrial gas producers follows slower economic growth and weakening demand from industry sectors including energy and minerals.