Praxair keen to buy assets in South Europe

22 January 2001 00:00  [Source: ICB]

Praxair is keen to strengthen its position in the South European industrial gases arena, and would be interested in buying assets, says Dennis Reilley, chairman and ceo.

Talking exclusively to ECN, Reilley said he was not disappointed by his predecessors' decisions not to get involved in the European industrial gases market. These 'prudent' decisions had stopped the company from paying too much for assets which would not fit well with its strategy.

He would be interested in any of the assets which the controlling shareholders of Messer, Goldman Sachs and Allianz Capital Partners, might wish to sell 'in the right part of the world. These would have to fit with existing infrastructure.' He suggested building on strengths in southeast Europe, especially Spain and Italy would be interesting.

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Industry sources suggest that these countries, along with the UK, may not be core business areas for Messer from 2002 onwards.

John Raquet of Cryogas Consulting says that Messer intends to divest its businesses in the Middle East, Asia and Africa as well as South America.

There are a number of scenarios which could see the major industrial gases players trying to strengthen their positions as a result of this divestment. Praxair would be prevented from taking advantage of any divestments in Latin America, because of its already strong position there, he suggests.

Reilley says his strategy is to concentrate on niche networks, rather than attempting to build stand alone sites, unless the economics are right. Reilley believes that the economies of networked systems are significantly better than that of stand alone plays.

It is 'too easy to get bigger without getting better,' he says.

ECN's Industrial Gases feature will appear next week.

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