Already one of the largest public companies based in Fairfield County, Praxair Inc. continues to mull an acquisition that would more than double the size of its U.S. work force.
The industrial gases industry was roiled in February after Air Products and Chemicals Inc. launched a hostile takeover bid for Airgas Inc., prompting Praxair to mull its own potential bid from the sidelines.
In the United States, Air Products has no packaged gas business in which cylinders of gases are sold for a range of industrial and medical applications that require relatively small volumes. That constitutes about 90 percent of the business of Radnor, Pa.-based Airgas, hence its appeal for Allentown, Pa.-based Air Products.
While Praxair has a large packaged gas business in North America already, the company”™s chief financial officer said that would not be a deterrent to making its own bid for Airgas.
Airgas has 14,000 employees. While Praxair”™s work force numbers more than 26,000 people, just 10,300 are in the United States. In addition to Air Products, Praxair competes against France-based Air Liquide S.A. and Germany-based Linde AG, whose U.S. packaged gas business Airgas acquired in 2007 for $495 million.
While Air Liquide and Linde have not expressed interest in riding to Airgas”™ rescue in the role of a “white knight” acquirer, Praxair expressed it is ready to saddle up under certain circumstances.
“We”™re keeping our options open as to whether we”™ll do anything,” said Jim Sawyer, chief financial officer of Praxair, speaking with investment analysts after the company”™s first quarter results. “We can”™t tell you definitively right now what we might do, but I think what I’ve said before is that we would have more synergies than anyone else in buying Airgas, because we run the second largest U.S. packaged-gas business already. And you should not assume that that would preclude us from (a Federal Trade Commission) standpoint.”
Sawyer added that if Air Products is successful in buying Airgas, it could still be a “net positive” for Praxair in several ways, without elaborating.
Sawyer and Praxair CEO Steve Angel were scheduled to give an update on the company at separate analyst confabs held after press deadline.
Praxair is not the largest employer in Danbury, but it is the largest public company based there and is among the biggest benefactors through donations to Danbury Hospital and other causes.
Praxair sales were $2.4 billion in the first quarter, a slight increase from the fourth quarter of 2009, but up 14 percent from a year ago, with half the bump the result of currency exchange rates. The company recorded a $340 million profit.
Praxair expects sales to total $10 billion this year; Airgas”™ annual sales have hovered around $4 billion the past three years.
Praxair is currently developing a large contract to supply nitrogen to ExxonMobil in Hawkins, Texas, and hopes for a similarly large contract to proceed with Chevron in Richmond, Calif., a project that has been slowed over tax and environmental issues.
BP, which is battling an oil slick and bad publicity in the Gulf of Mexico, is also a major Praxair client.
For growth, Praxair is counting not just on the global economic recovery and rising oil prices fueling additional oil exploration, but also the concept of enhanced oil recovery ”“ a process by which gases are pumped into oil fields that are nearly tapped, forcing additional oil to the surface that otherwise would be stuck underground.
Praxair also hopes to generate $1 billion in revenue within seven years from goal gasification projects in China, after generating $400 million there in total sales in 2009.
Sales in India were half that, which it said gives it the top market share of any third-source competitor on the subcontinent.
