17 April 2007 08:32 [Source: ICIS news]
Updated: Adds Air Liquide share price/webcast detailBy Jeanne Lim
SINGAPORE (ICIS news)--Air Liquide is to buy German engineering firm Lurgi for €550m ($743.2m) in a bid to expand its technological know-how, the French industrial gases group said on Tuesday.
The purchase of Lurgi, which is owned by Global Engineering Alliance (GEA Group), is equivalent to an enterprise value of €200m after including the assumption of Lurgi’s cash position as well as its pension and other liabilities, Air Liquide said in a statement.
The transaction is subject to approval by the European and American competition authorities.
This acquisition will help Air Liquide grow its large industries world business line, strengthening its resources in the hydrogen markets and giving it access to the coal-to-liquid (CTL) and coal-to-chemicals (CTC) sectors, the firm said.
The CTL and CTC processes enable the transformation of coal into liquid hydrocarbons or basic chemicals.
"The acquisition of Lurgi gives us the capacity to support the important growth of the group…Our capacity to innovate, in R&D (research and development) as well as technology, is a key growth driver for the group," said Francois Darchis, member of Air Liquide’s executive committee and head of the firm’s engineering and construction division.
With nearly 1,300 employees and total sales of around €850m in 2006, Lurgi has a large portfolio of technologies, from producing hydrogen and synthesis gas to biofuel production processes, Air Liquide said.
Lurgi’s main engineering centres are situated in Germany, Poland, the US, India and South Africa.
Air Liquide has five engineering and construction centres in France, the US, Japan, China and India, and a total of 1,500 employees. The French firm has partnered Lurgi for many years, with the most recent projects in Saudi Arabia and Malaysia.
John Glen, the company’s vice president of finance and administration, and Darchis will hold a conference call on Tuesday at 11:00 hour Paris time (09:00 GMT). The call will be archived.
Air Liquide’s shares were trading down 0.41% at €185.60 at 08:46 GMT on Tuesday
($1 = €0.74)
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