After a slight decline in 2015, the US industrial gas market returned to growth in 2016 by posting total revenues of $20bn – growth of 2%. The key event of 2016 was of course the completion of the Airgas acquisition, by Air Liquide. This propelled Air Liquide to become the largest gases business in the US. But for how long?
In June 2017, Praxair and Linde signed a definitive Business Combination Agreement, which will see the two companies coming together to create the largest ever industrial gas corporation. The merger is subject to the approval from over 20 anti-trust authorities, with the largest hurdle coming for the US, which will be analyzed by the Federal Trade Commission (FTC). gasworld Business Intelligence estimates that Praxair and Linde will have to divest of assets that accumulatively generated revenues of approximately $800m in the US, in 2016. In addition to gas production divestments, Michael White, Praxair’s CFO recently noted that Linde’s US healthcare business (Lincare) may not be part of the new combined company. However, Linde has declared that Lincare will remain part of the group, for now.
Away from the plethora of M&A activity that has, and continues to take place within the US gases business, organic growth is again beginning to build. This is partially thanks to the ongoing stabilization of energy prices, which have a significant positive effect on industrial gas companies pricing for mainly air gases and hydrogen. Most of the Tier One’s have also reported positive volume growth through their respective Americas segments.
