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Air Products takes control of Indura

by Lou Whiteman  |  Published June 19, 2012 at 11:33 AM
air-products_22x128.jpgAir Products and Chemicals Inc. said Tuesday, July 19  that it would spend $884 million for a 67% stake in Indura SA of Chile as the industrial gas provider looks to expand its presence in South America.

Santiago-based Indura, according to Air Products, is the largest independent industrial gas company in Latin America, generating sales of $478 million from liquid bulk, small on-sites and packaged gases. The company employs more than 2,300 people in 20 production plants, 40 filling stations and more than 100 retail outlets spread across Argentina, Chile, Colombia, Ecuador and Peru.

Air Products, of Allentown, Pa., already has a presence in Latin America via wholly-owned businesses in Argentina and Brazil and a Mexico-based joint venture with Grupo Infra. But the company, according to regulatory filings, pulled in just $52.5 million of its $2.34 billion in first-quarter sales from the region. Air Products chairman and CEO John E. McGlade in a statement said that the investment gives Air Products extra scale and a strong partner in Latin America, and should make it easier for the company to compete for business from multinational firms who need to source gases globally.

"Indura is a very well known and respected brand that represents a quality business, strong leadership and dedicated employees, McGlade said. "By leveraging Indura's local leadership and Air Products' global expertise, we expect to better serve key global customers and further expand our growth opportunities in one of the world's most promising markets."

The deal continues a reshaping of Air Products, which in 2010 launched a hostile $5.9 billion bid for rival Airgas Inc. designed to consolidate the U.S. gas market. That bid was withdrawn in February 2011 after Air Products was unable to remove Airgas' poison pill, but Air Products earlier this year announced plans to sell its homecare business in five European countries to Linde AG for $750 million.

Indura is controlled by Inversiones y Desarrollo SA, or Invesa, the holding company for the Briones family. Invesa chairman Hernán Briones Goich in a statement said that "joining the Air Products family will position Indura to benefit from the technologies, experience and best practices of a successful global player in the industrial gases industry" while allowing the company "to leverage our market knowledge and long-term relationships we have established in Latin America."

The purchase is expected to close by early July, subject to conditions, and Air Products said it would contribute to earnings in fiscal 2013.

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Tags: Air Products and Chemicals Inc. | Indura SA | M&A | middle markets

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