Financial consortium favourite for gas stake

11 September 2000 00:00  [Source: ICB]

A consortium of German venture capital group Allianz Capital Partners (ACP) and Goldman Sachs of the US is believed to have won the race to acquire Aventis' 66.6% stake in industrial gases producer Messer, beating UK private equity group BC Partners.

According to a newspaper report, Aventis will begin 'exclusive negotiations' with the Allianz-led alliance this month, and a deal could be concluded by mid- October.

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Analysts have speculated that ACP and Goldman Sachs are likely to limit the global expansion plans of Messer, in a bid to restore profitability to the company.

'One of their options is to focus on the company's operations in Europe, looking for bolt-on acquisitions in this region,' said Hans Zayed, an analyst with Paribas.

While Aventis will not comment on particulars, a spokesman for the Franco-German group said the deal would be timed to reap the most benefit from changes in German tax laws.

New provisions granting exemptions from capital gains taxes on divestment of corporate holdings were to take effect at the beginning of 2001, but have been delayed a year.

Quoting 'an internal discounted cash flow analysis,' the Financial Times suggests the Aventis stake could change hands for E1.7-1.9bn ($1.5-1.7bn). This would take into account Messer's debts of E1.4bn.

The Messer family, which owns 33.3% of the gases producer, is said to have accepted the consortium as the majority shareholder and will work with it on a restructuring scheme that would see the spin-off of 'big parts of the company'.

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