NewsFlashLinde in £8bn agreed bid for BOC

06 March 2006 08:12  [Source: ICIS news]

LONDON (ICIS news)--German industrial gases and engineering group Linde unveiled on Monday an agreed bid for BOC which values its British rival at about £8bn ($14bn/Euro11.7bn).

The £16 per share offer, which has been accepted by the BOC board, will create the world's largest industrial gases group ahead of France's Air Liquide and Air Products of the US.

Linde, which has been stalking BOC for several years, said its offer represents a premium of 39% to the closing price of £11.51 per BOC share on 23 January, the last business day prior to the announcement by the British company that it had received an approach from Linde.

If approved by shareholders and regulatory authorities, the combined group will have annual sales of about Euro11.9bn, said Linde.

"Both companies have complementary geographic positions and products,” said Linde. "With the acquisition of BOC, Linde will in particular enhance its position in the fast-growing Asian Pacific region and in key future growth sectors such as hydrogen."

"Linde and BOC are a perfect match," said Linde chief executive Wolfgang Reitzle. "We will combine the best competencies and abilities of both organisations in a single integrated group and we will be able to offer our customers a significantly enlarged product range as well as comprehensive services - and we will be able to do so worldwide.

"We will have an even better entrance into the international fast-growing markets which will provide the basis for stable future earnings and cash flows. With this acquisition we will continue to focus on our strategy of dynamic, earnings-based growth and to achieve a sustained creation of value."

Linde added in a statement that the enlarged group would have a complementary worldwide footprint with a presence in approximately 70 countries.

"In particular, in the fast-growing region of Asia/Pacific, Linde will profit from the regional strength of BOC. In Europe and South America, Linde will consolidate its existing strong position," it said.
 
It added that the combined group would create an opportunity to deliver synergies, prior to one-off expenses, of approximately Euro250m a year, to be fully realised during 2009.

"These synergies will be predominantly based on joint supply management optimisation and combined procurement volumes and a reduction in selling, general and administrative expenses," it said.

The deal is expected to incur one-off expenses of around Euro200m, all of which were expected to be incurred before the end of 2008, said Linde.
 
It added that the offer for BOC was subject to the satisfaction or waiver of European and US competition authority clearance pre-conditions and approvals of BOC's shareholders and the English courts. 

"Given the complementary product portfolios of both companies, Linde is confident that any pre-conditions can be satisfied," it said. Linde currently anticipates this will occur by the end of May 2006. If the pre-conditions are satisfied by that time, the transaction is expected to be completed in the third quarter of 2006, it added.

By: Neil Sinclair
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly