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Air Products Launches Take Over Bid for Airgas

Air Products (NYSE: APD) announced that it has made an offer to acquire Airgas, Inc. (NYSE: ARG) for $60.00 per share in cash. The offer was made in a letter to Airgas' Board of Directors yesterday after the CEOs of the two companies had previously discussed Air Products' interest in acquiring Airgas and after Air Products had made two written offers, and these offers and Air Products' requests to discuss them were rejected by Airgas.

At $60.00 per share, the offer provides a 38% premium to Airgas shareholders based on yesterday's closing price of $43.53 and is 18% above Airgas' 52-week high. The total value of the transaction is approximately $7.0 billion, including $5.1 billion of equity and $1.9 billon of assumed debt. The acquisition is expected to be immediately accretive to Air Products' earnings per share on both a GAAP and cash basis, excluding expected one-time costs.

Air Products' offer fully values Airgas' complementary capabilities and attractive long-term prospects. Headquartered in Pennsylvania, the combined company would be the largest industrial gas company in North America and one of the largest in the world, with distinctive strengths across all geographies and in all three distribution channels: packaged gases, liquid bulk and tonnage. A combination of the two companies would be financially and strategically compelling, with substantial cost synergies of $250 million by the end of year two, and the ability to accelerate growth both domestically and internationally by leveraging Airgas' extensive U.S. sales force and packaged gases skills on the foundation of Air Products' global presence and infrastructure.

Air Products is fully committed to pursuing this transaction, and has secured committed financing from J.P. Morgan to complete the offer. Air Products is prepared to make appropriate divestitures to address regulatory issues.

John E. McGlade, Air Products' chairman, president and chief executive officer, said, "This is an extremely compelling transaction with undeniable strategic and industrial logic that would benefit shareholders, customers and employees of both companies. Bringing together these two highly complementary companies would create substantial value. We highly value the talented operating team at Airgas, and believe they would benefit greatly from the expanded opportunities and resources available to them as part of a larger and stronger global U.S. company with significantly greater long-term growth prospects than a stand-alone Airgas. While we are disappointed that Airgas has thus far prevented its shareholders from receiving a substantial premium and immediate liquidity, we have repeatedly communicated to the Airgas Board our willingness to improve our offer to reflect any incremental value they can demonstrate. While it remains our strong desire to reach an agreement with Airgas on a friendly basis, we are fully committed to pursuing this transaction and are prepared to take all necessary steps to complete it, including making an offer directly to Airgas shareholders."


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