Air Products Bids Total $7.1B for Airgas

Updated to include Airgas response to bid.

LEHIGH VALLEY, Pa. (TheStreet) -- Air Products (APD) made an unsolicited $60 offer to buy rival Airgas(ARG) after previous overtures were rejected.

Air Products said Friday the offer is a 38% to Airgas' closing stock price Thursday of $43.53.

Shares of Airgas were trading at $61.75 in premarket trading Friday.

Airgas said its board would review the proposal with its financial and legal advisors and advised shareholders to "take no action at this time."

The total value of the offer is about $7 billion, including $5.1 billion of equity and $1.9 billion of debt. Air Products said the acquisition is expected to be immediately accretive to earnings.

Air Products, in a press statement, said a combination of the two companies would create the largest industrial gas company in North America and one of the largest in the world. Air Products said cost synergies of $250 million would be recognized by the end of the combination's second year.

Air Products said it is "fully committed to pursuing this transaction" and has secured financing from JPMorgan Chase to complete the offer. Air Products also said it's "prepared to make appropriate divestitures to address regulatory issues."

While it remains our strong desire to reach an agreement with Airgas on a friendly basis, we are fully committed to pursuing this transaction and are prepared to take all necessary steps to complete it, including making an offer directly to Airgas shareholders," said John McGlade, Air Products chairman and CEO, in a statement.

McGlade wrote in a letter to Peter McCausland, CEO of Airgas, that he was "disappointed" that two previous offers were rebuffed over the last four months, the New York Times reports. The CEOs met several months ago and agreed on the merits of a merger, but Airgas has since refused to consider any approach from Air Products, the Times adds, citing people briefed on the matter.

-- Reported by Joseph Woelfel in New York.

Follow TheStreet.com on Twitter and become a fan on Facebook.

>To order reprints of this article, click here: Reprints