This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Air Products and Air Liquide Vaporize Their Bid for BOC

A takeover deal valued at more than $11 billion between three of the world's largest industrial gas producers collapsed Wednesday, after the companies failed to get the Federal Trade Commission to approve it.

Air Products and Chemicals (APD - Get Report) of the U.S. and the French gas maker Air Liquide SA abandoned their joint offer for the BOC Group (BOX) of Britain just two days before a May 12 deadline for the FTC to approve the deal, noting that the outlook for approval appeared grim.

The news vaporized BOC's shares. In afternoon trading Wednesday, American depositary receipts of the company were trading down 9 9/16, or 24%, at 30 7 /16. The shares had risen recently, jumping more than 19% in the last week and a half as investors remained optimistic that an agreement would be reached, but collapsed Wednesday when those hopes were dashed. Shares of Allentown, Pa.-based Air Products were up 7/8, or 3%, to 31 3/16. (Air Products and Chemicals finished up 7/8, or 3%, at 31 3/16.)

The companies, which make and distribute everything from elemental hydrogen and nitrogen to complex compounds for microchip manufacturers, had agreed to buy BOC in July 1999 after several months of bidding against one another for the company. They planned a complex scheme to carve up most of BOC among themselves, while divesting enough assets to please the FTC.

The original plan called for Air Products to pick up most of BOC's operations in Britain and Ireland, while Paris-based Air Liquide would take BOC's operations in Australia. BOC's Asian assets would be carved up equally between the two bidders, while the U.S. assets would be partially split up and the rest sold. The German engineering company Linde AG, which recently acquired Swedish gas producer Aga, was reportedly eager to pick up any U.S. assets for sale, according to press reports at the time.

In 11th-hour negotiations with the FTC in recent days, the bidders even suggested they might be willing to sell all of BOC's operations in the U.S., which includes more than 70 manufacturing sites and a vast truck, train and pipeline distribution network.

But even the notion of a full sale of BOC's U.S. assets did not appear to appease federal regulators, who felt that the deal would eliminate a major competitor in a sector that is already dominated by a small number of major players. Air Liquide, BOC and Air Products, along with U.S.-based Praxair (PX) and Linde control most of the world's gas market.

"During 10 months of discussions with the FTC, Air Products and Air Liquide made a number of comprehensive and practical proposals, including divestitures, which responded to the demands of the FTC," Air Liquide and Air Products said in a statement Wednesday. "Nevertheless, it has recently become clear that the FTC will not approve the offer by May 12, 2000."

Likewise, BOC said it is comfortable with the idea of continuing to operate on its own. "BOC has significantly restructured and reorganized over the past two years through a major program to improve productivity, position the company to achieve top-line growth, and develop its position as the world's No. 2 industrial gases company," it said in a statement.

A representative for Air Products was unavailable for comment, but the companies said that despite the demise of their planned acquisition, they would continue to pursue a potential FTC blessing for a deal, and could make a fresh offer for BOC.

"We are still very much interested in making a deal," said Remi Charachon, corporate communications director for Air Liquide. "But its unclear now how a new deal would be structured and priced, since the regulatory situation has changed so much since July 13."

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
APD $137.92 -0.31%
AAPL $117.82 -0.18%
FB $105.45 0.04%
GOOG $750.27 0.28%
TSLA $231.11 0.64%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs