Gas market consolidates

- Last updated on GMT

Related tags: Air liquide, Industrial gas, European union

The European Commission has approved Air Liquide's proposed
acquisition of Messer Griesheim's industrial gas business in
Germany, the United Kingdom and the USA. The acquisition alters the
balance of power in Europe's industrial gas market, a market that
has played an increasingly significant role in food production in
recent years, writes Anthony Fletcher.

Prior to the acquisition, Messer and Linde dominated the German market, with Air Liquide a distant third. The acquisition will therefore enormously boost Air Liquide's position in Germany, with the potential to generate sales of almost €1 billion.

The proposed acquisition, which has been approved by Messer Griesheim's current shareholders, is subject to the prior approval of antitrust authorities in Europe and the United States. As a result of the process undertaken with the European Commission, Air Liquide has agreed to a certain number of divestitures to comply with competition laws and secure the required authorisation in a reasonable timeframe.

"Through this acquisition, the Group's new position in Germany and in Europe will enable us to further develop all our business lines and sectors of expertise,"​ said Benoît Potier, chairman of Air Liquide's management board.

"I am fully aware of the impact of this decision on the teams involved in the divestitures in Germany. I will see to it that the anticipated divestitures take place in a coherent framework that is consistent with the Group's principles and ensures the continuity of these activities.

"We can now turn our attention to our organizational plans in Germany and continue discussions to obtain FTC approval for the US portion of the proposed acquisition. I remain confident in our ability to conclude this transaction successfully by mid-year."

The industrial gas business is confident of further growth in the food sector, with new opportunities being identified.

"The transportation of food revolves around gas,"​ said Hans-Dieter Ziegler, food marketing manager for industrial gases group Messer."Since the introduction of HACCP regulations, many products have to be chilled down during transportation, and this involves the use of gases and equipment. Temperature is now a big issue within the food industry."

Chilling ambient food could be the next gap in the market. Ambient food is shelf-stable produce that usually does not require refrigeration or chilling. Europe, of course, has some of the most stringent food regulations in the world, and some believe the down-chilling of some ambient food during transport is an inevitability.

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