1. This paper and its author offer no guarantees as to completeness and correctness
Research: Prodeep Mookerjee
prodeep.mookerjee@gmail.com
BACKGROUND
The consolidation moves in the Industrial gases sector
Air Liquide/Air Gas and Linde/Praxair
INDUSTRIAL GAS MAJORS
On a global platform, the Industrial Gases (or air-gas)
sector includes four global companies; ‘the Majors’ - Air
Liquide of France and market leader, the German Linde
Group, and two American players, Air Products &
Chemicals and Praxair.
Barometric Stocks: Stocks of the Majors in the industrial
gas sector are considered good barometers of economic and
industrial activity, these companies being global suppliers of
basic materials used across the industrial spectrum.
The tendency to react to macro trends is particularly in
evidence today with the Majors shifting their geographic and
technological focus in tandem with global adjustments in
industrial activity.
Determinants driving policy include the OECD sovereign
debt crisis, emergent patterns of geo-political risk in the
OPEC club, the increasing weight of developing economies,
global climate-change and the volatility in the cost of and
demand for energy.
Cyclical Hedging: The Majors are driven by economic tides
but they also have structural ‘hedges’; stable revenue
streams based on long-term, ‘over-the-fence’ contracts and
piped gas networks in industrial clusters, servicing a broad
range of clients.
The two sector leaders have also aggressively built-up their
healthcare (homecare) market shares, a typically noncyclical
business segment, even while the other two have divested
their interests in healthcare after initially having followed
the M&A driven trend.
Competitive Position: A look at the history of the Majors
reveals a picture of a close-knit group with many common
roots; an exclusive group that has long eaten from the same
table, and eaten well. Yet they are extremely competitive,
periodically viewing the other with cannibalistic intent,
forging opportunistic alliances, sharing the ‘spoils’ when
required to by regulatory barriers and continually jockeying
for position in every available market.
It’s not businesses that
succeed – it’s the people…
Air Liquide
Benoît Potier
Chairman and
Chief Executive Officer since 2006
Employees: 68,000
Linde Group
Wolfgang Büchele, (r)
President and
Chief Executive Officer since 2014
Employees: 64,500
Mr. Büchele took over from
Wolfgang Reitzle, who led Linde’s
steady and continuous growth for a
decade. Büchele issued one profit
warning after another, and market
sentiment was negative.
Wolfgang Reitzle returned to the
company earlier this year as head of
its supervisory board.
Praxair
Stephen F Angel
Chairman, President and Chief
Executive Officer since 2007
Employees: 27000
Air Products & Chemicals
Seifi Ghasemi
Chairman, President and Chief
Executive Officer since June 2014
Employees: 20,000
Air Products investors expect him
to be the catalyst for improved
operational performance,
profitability and return on capital.

2. The market leader, Air Liquide, is noted for adopting a particularly aggressive
decentralized approach, reflecting perhaps remnants of
a cultural ethos from France’s colonial past.
The Linde Group’s market approach, on the other hand,
demonstrates reliance on technological competencies
buoyed by some of the pioneering spirit of the British
imbibed, perhaps, through the BOC takeover. It has an
international flavor in the higher echelons of the
company which it sees as a differentiating advantage.
Both Air Liquide and Linde are true international
companies in ‘footprint’ and vision.
Praxair and Air Products are quintessentially
‘American’ companies; quick on their feet and with an
‘us and them’ view of the world. With controlling
market shares in the US and locational access to target
countries in the Americas they have a market base even
as they make inroads in the BRIC countries and the
Middle East armed with long standing relationships
with the US oil majors.
Growth: In the near and mid-term, growth in the
industrial gas market is expected to continue to exceed
that of industrial production, driven by a multitude of
factors including: coming on stream of start-ups,
growth of emerging economies, increasing demand for
energy, environment and emissions regulation, older
populations and an expanding healthcare sector, with
advancements in industrial technology defining the
landscape.
Innovation and Consolidation: R&D activity is
focused on emerging application areas and efficiency:
 Hydrogen the ‘Green molecule’;
 reduction in costs and the energy intensity of
gas separation technology with new
compression options including the Dresser-
Rand supported Ramgen project, reduced plant size and hybrid solvents,
pressure calibrated membrane banks and sorbent ‘swing’ control;
 Business-process optimization with EWSs like SAP; sub-system GPS/RFID asset
management.
2015 Air
Liquide
Linde
Group
Praxair Air
Products
Mkt. Cap 34.08B€ 28.92B€ 34.84B$ 34.08$
Shares-Million 345.6 185.73 285.23 216.55
Gross Yield % 2.64 1.64 2.46 2.17
Sales 16.38B€ 17.94B€ 10.78B$ 9.89B$
Operating
Profit %
15.99 12.08 22.57 21.18
Net Profit % 10.82 7.50 15.07 15.63
Air Liquide: FT.com: The 20 analysts offering
12 month price targets have a median target
of 101.50, with a high estimate of 130.00 and a
low estimate of 80.00. The median estimate
represents a 2.94% increase from the last
price of 98.60.
Linde: FT.com: The 26 analysts offering 12
month price targets have a median target of
150.00, with a high estimate of 180.00 and a
low estimate of 110.00. The median estimate
represents a -1.99% decrease from the last
price of 153.05.
Praxair: FT.com: The 16 analysts offering 12
month price targets have a median target of
125.00, with a high estimate of 149.00 and a
low estimate of 112.00. The median estimate
represents a 2.32% increase from the last
price of 122.16.
Air Products: FT.com: The 16 analysts offering
12 month price targets have a median target
of 161.50, with a high estimate of 180.00 and a
low estimate of 125.00. The median estimate
represents a 2.60% increase from the last
price of 157.40.
Share Prices and Forecasts

3. Simultaneously, consolidation of the expanded organizational and human resource
base, a result of their frenetic M&A activity over the last decade, will propel the growth
of the Majors in the global market.
A development in FEED competencies is also evidenced which plays in well with ‘first-
in’ advantage and scope enhancement possibilities in the process plant business
generally.
Market Trends: Market research
reports agree that the US
continues to remain the largest
regional market. Region-wise, the
Asia-Pacific is projected to
witness maximum growth
prospects for industrial gases,
followed by Latin America and
the Middle East. India and China
offer high potential in a cost-
competitive market with the
focus on infrastructure
development and the increasing
concentration of the light
engineering, electronics and food
processing industries in these
regions.
Worldwide, there is recognition of the
inevitability of unprecedented public and
private investment driven by ‘carbon
capture’ targets and the need to mitigate
the ill-effects of climate change.
In this context the conventional and non-
conventional energy sectors, hydrocarbon
processing and refining as well as water
processing and management are areas of
particular interest to the Majors.
The Majors and the ‘others’ continue
evaluating mega-projects, negotiating joint
ventures and funding strategic acquisition
of local firms in most economies, in their
endeavor to gain market share and ensure
their success in the new millennium.
The ‘Others’
Prominent regional companies
include Airgas (in the US), Taiyo Nippon
Sanso (in Asia and the US), and Messer
(in Europe and also China, Algeria and
Peru).
New competitors making a mark
include the Chinese Hangzhou Oxygen
Plant Group Co, Ltd (manufacturing
ASUs - air separation units), Yindge
Gases also in China, and Cryogenmash
(making ASUs) in Russia.
Besides, there are thousands of others,
medium and small players, in local
markets.