On July 5, Taiyo Nippon Sanso acquired US company Praxair’s European business worth about 5,000 million euro (approximately JPY643 billion) for affiliation and executed a share purchase agreement.

On June 1, Praxair reached an agreement with German Linde AG to merge by establishing a newly formed Irish holding company Linde Public Limited. The competition law authorities in the relevant countries have been requiring splitting and transfer of Praxair’s business assets, and the European Commission is requesting that Praxair sells a part of its European businesses to a third party.

TNSC’s board of director meeting held on June 7 resolved that it would participate in the bid relating to the split transfer. Following the adjustments on the terms and conditions through discussions with Praxair after the bidding TNSC reached the share purchase agreement on July 5. TNSC will acquire the said shares after establishing a new affiliated company for its integrated management in Europe.
The target businesses for the transfer include almost all Praxair’s European business concretely of the industrial gas business in Germany, Spain, Portugal, Italy, Norway, Denmark, Sweden, the Netherlands and Belgium, and the carbon dioxide and helium-related business in the United Kingdom, Ireland, the Netherlands and France.

The acquisition price of share is 5,000 million euro (approximately JPY643.8 billion). The advisory costs are estimated to be about JPY2.7 billion. 　

The procurement of funds is made with cash on hand and through bridge loans and then refinancing by borrowing from financial institutions, issuing corporate bonds, and hybrid financing. There is no plan to finance by equity financing which may lead to a stock dilution. Out of the target businesses the three companies headquartered in Spain, Germany and Italy showed the management performance in FY2017 (ending Dec,’17) of sales amounting to JPY164 billion (1,273 million euro) with EBIT of JPY34.2 billion (266 million euro) and EBITA of JPY51.6 billion (400 million euro).
The profit rate is estimated to exceed 20%.

These three companies account for the major part of the target business and the scale of sales amounting to over JPY160 billion is equivalent to that of TNSC’s business in the United States.
Although in USA and Asia there may remain little chance for TNSC to acquire split business as it has already a certain market share, the new bridgehead acquired at this time in Europe has brought a great footstep to TNSC which aims for a global company.
The share transfer is scheduled to be executed in November. TNSC’s accomplishment to acquire the business assets is subject to the completion of merger of Praxair and Linde AG after their getting approval of the competition law authorities in the relevant countries over the world.