Attached files
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| 8-K - CURRENT REPORT - AIR PRODUCTS & CHEMICALS INC /DE/ | form8k.htm |
| EX-99.2 - COMPLAINT - AIR PRODUCTS & CHEMICALS INC /DE/ | ex99-2.htm |
Exhibit
99.1
Air Products Offers to Acquire Airgas for $60.00
Per Share in Cash
$7.0
Billion Offer Provides 38% Premium to Airgas Shareholders
Combination
Would Accelerate Growth, Create Leading Global Industrial Gas Company
with
Strength
Across All Distribution Channels
Air
Products Expects Synergies of $250 Million and Immediate Earnings
Accretion
Air
Products Committed to Completing Value-Enhancing Transaction
LEHIGH
VALLEY, Pa. (February 5, 2010) – Air Products (NYSE: APD) today announced that
it has made an offer to acquire Airgas, Inc. (NYSE: ARG) for $60.00 per share in
cash. The offer was made in a letter to Airgas’ Board of Directors yesterday
after the CEOs of the two companies had previously discussed Air Products’
interest in acquiring Airgas and after Air Products had made two written offers,
and these offers and Air Products’ requests to discuss them were rejected by
Airgas.
At $60.00
per share, the offer provides a 38% premium to Airgas shareholders based on
yesterday’s closing price of $43.53 and is 18% above Airgas’ 52-week high. The
total value of the transaction is approximately $7.0 billion, including $5.1
billion of equity and $1.9 billon of assumed debt. The acquisition is expected
to be immediately accretive to Air Products’ earnings per share on both a GAAP
and cash basis, excluding expected one-time costs.
Air
Products’ offer fully values Airgas’ complementary capabilities and attractive
long-term prospects. Headquartered in Pennsylvania, the combined company would
be the largest industrial gas company in North America and one of the largest in
the world, with distinctive strengths across all geographies and in all three
distribution channels: packaged gases, liquid bulk and tonnage. A combination of
the two companies would be financially and strategically compelling, with
substantial cost synergies of $250 million by the end of year two, and the
ability to accelerate growth both domestically and internationally by leveraging
Airgas’ extensive U.S. sales force and packaged gases skills on the foundation
of Air Products’ global presence and infrastructure.
Air
Products is fully committed to pursuing this transaction, and has secured
committed financing from J.P. Morgan to complete the offer. Air Products is
prepared to make appropriate divestitures to address regulatory
issues.
John E.
McGlade, Air Products’ chairman, president and chief executive officer, said,
“This is an extremely compelling transaction with undeniable strategic and
industrial logic that would benefit shareholders, customers and employees of
both companies. Bringing together these two highly complementary companies would
create substantial value. We highly value the talented operating team at Airgas,
and believe they would benefit greatly from the expanded opportunities and
resources available to them as part of a larger and stronger global U.S. company
with significantly greater long-term growth prospects than a stand-alone Airgas.
While we are disappointed that Airgas has thus far prevented its shareholders
from receiving a substantial premium and immediate liquidity, we have repeatedly
communicated to the Airgas Board our willingness to improve our offer to reflect
any incremental value they can demonstrate. While it remains our strong desire
to reach an agreement with Airgas on a friendly basis, we are fully committed to
pursuing this transaction and are prepared to take all necessary steps to
complete it, including making an offer directly to Airgas
shareholders.”
-
more-
Air
Products’ financial advisor for this transaction is J.P. Morgan Securities Inc.
and its legal advisors are Cravath, Swaine & Moore LLP and Arnold &
Porter LLP.
The
management of Air Products will host a conference call and live webcast today,
Friday, February 5, 2010 at 8:30 a.m. ET to discuss this announcement. The
company welcomes all members of the investment community to listen to the call
live by dialing (913) 312-0685 and providing the passcode 4248658. The live
webcast of the call can be accessed at www.airproducts.com. An audio replay of the call
will be available after the call’s conclusion and can be accessed by calling
(888) 203-1112 in the U.S. or (719) 457-0820 outside the U.S. and entering the
passcode 4248658.
For more
information on Air Products’ offer to acquire Airgas, please visit www.airproducts.com/airgasoffer.
Below is
the full text of the most recent letter from Air Products to
Airgas:
February
4, 2010
Mr. Peter
McCausland
Chairman,
President and CEO
Airgas,
Inc.
259 North
Radnor-Chester Road, Suite 100
Radnor,
PA 19087-5283
Dear
Peter:
As you
know, we have been trying for the last four months to engage Airgas in friendly
discussions regarding a business combination. We are deeply disappointed that
you and your board have rejected out of hand two written offers providing your
shareholders substantial premiums. In our prior correspondence, we clearly and
repeatedly stated our flexibility as to both value and form of consideration,
yet you have continued to refuse even to discuss our offers. Your unwillingness
to engage has delayed the ability of your shareholders to receive a substantial
premium. We remain committed to completing this transaction, and we have
therefore decided to inform your shareholders of our offer to expedite the
process.
Air Products is prepared to proceed
with a fully financed, all-cash offer for all Airgas shares at $60.00 per share, which reflects a
premium of 38% to Airgas’ closing price today of $43.53 and 18% above its 52-week high.
In addition to a substantial premium, Airgas shareholders will benefit from
immediate liquidity in an uncertain economic environment through an offer which we believe fully
values Airgas’ complementary capabilities and long-term growth
prospects.
-
more-
Bringing
together our complementary skills and strengths will create one of the world’s
leading integrated industrial gas companies. Combining Air Products’ global
leadership in liquid bulk and tonnage gases with Airgas’ leadership in U.S.
packaged gases will create the largest industrial gas company in North America
and one of the largest globally – a leader with distinctive strengths and
world-class competencies across all distribution channels and geographies. While
we have a strong and profitable packaged gas business in Europe and other key
international markets, we do not have a position in the U.S. packaged gas
business where Airgas is the market leader. As part of this uniquely compelling
combination, Airgas would be well positioned to achieve higher growth than it
could achieve on a stand-alone basis.
We do not
believe there are any significant financial or regulatory impediments to your
shareholders’ timely realization of this substantial cash premium. We have
secured committed financing from J.P. Morgan to complete the offer and are
committed to maintaining a robust capital structure. We have also thoroughly
considered the regulatory issues related to this combination and are prepared to
make appropriate divestitures, none of which we expect to be
material.
The
strategic and industrial logic of this combination is clear, and we are
confident that an Air Products/Airgas combination would create greater value
than Airgas or Air Products could each achieve on its own. There are many
advantages to consummating this combination now, including:
|
●
|
The
opportunity to improve growth, returns and cash
generation.
|
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●
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Substantial
cost synergies, which are expected to yield savings of $250 million
annually when fully realized, primarily related to reductions in overhead
and public
company
costs, supply chain efficiencies, and better utilization of
infrastructure.
|
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●
|
The
ability to leverage Airgas’ extensive U.S. sales force and packaged gases
skills, and to build on the foundation of Air Products’ global presence
and
infrastructure,
to
accelerate growth both domestically and
internationally.
|
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●
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An
integrated platform better able to capture economies of scale from
extensive engineering, operations and back office capabilities with a much
greater reach and ability
to
provide
better overall customer service.
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●
|
Air
Products’ presence in all of the world’s key industrial gas markets,
increased cash flow and greater access to capital would allow Airgas to
achieve international
expansion
far faster and at a much lower cost, while accelerating its growth through
acquisitions.
|
We
believe the timing for this combination is ideal. The economy is just beginning
to emerge from recession, and together we would be able to take full advantage
of the substantial growth potential, economies of scale, and synergies unique to
this transaction. You have made clear your international growth aspirations,
which will require significant time and expense to build out on your own. Air
Products has the global infrastructure in place that would allow you to achieve
your goals faster and better. Airgas is also just in the initial stages of
implementing SAP, and our demonstrated expertise in this area would greatly
reduce the time, expense and disruption associated with this vital
rollout.
Bringing
our two companies together would also benefit employees, customers and the
communities in which we operate. We highly value the talented operating team at
Airgas, which would benefit greatly from the expanded opportunities and
resources available as part of a larger and stronger global U.S. company
headquartered in Pennsylvania -- with significantly greater long-term growth
prospects than a stand-alone Airgas. Your customers would benefit from a more
robust product offering from a company with expanded resources and global
scope.
-more-
Peter,
let me reemphasize as I have in past discussions that Air Products is fully
committed to the successful completion of this compelling transaction. Your
continuing refusal to engage with us will serve only to further delay your
shareholders’ ability to receive a substantial all-cash premium. While we would
strongly prefer to proceed through friendly negotiations, you should not doubt
our resolve to take the necessary actions to complete this transaction. We would
welcome the opportunity to meet with you or with any special committee of your
independent directors which has been or will be formed to consider our offer, as
well as their independent financial and legal advisors. Finally, we reiterate
our willingness to reflect in our offer any incremental value you can
demonstrate.
Very
Truly Yours,
John E.
McGlade
Chairman,
President and Chief Executive Officer
cc: Airgas
Board of Directors
Air
Products (NYSE:APD) serves customers in industrial, energy, technology and
healthcare markets worldwide with a unique portfolio of atmospheric gases,
process and specialty gases, performance materials, and equipment and services.
Founded in 1940, Air Products has built leading positions in key growth markets
such as semiconductor materials, refinery hydrogen, home healthcare services,
natural gas liquefaction, and advanced coatings and adhesives. The company is
recognized for its innovative culture, operational excellence and commitment to
safety and the environment. In fiscal 2009, Air Products had revenues of $8.3
billion, operations in over 40 countries, and 18,900 employees around the globe.
For more information, visit www.airproducts.com.
ADDITIONAL
INFORMATION
This
communication does not constitute an offer to buy or solicitation of an offer to
sell any securities. No tender offer for the shares of Airgas, Inc. (“Airgas”)
has commenced at this time. In connection with the proposed transaction, Air
Products, Inc. (“Air Products”) may file tender offer documents with the U.S.
Securities and Exchange Commission (“SEC”). Any definitive tender offer
documents will be mailed to stockholders of Airgas. INVESTORS AND SECURITY HOLDERS OF AIRGAS, INC. ARE
URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of these documents (if and
when available) and other documents filed with the SEC by Air Products through
the web site maintained by the SEC at http://www.sec.gov.
In connection with the proposed transaction, Air Products may file a
proxy statement with the SEC. Any definitive proxy statement will be mailed to
stockholders of Airgas. INVESTORS AND SECURITY
HOLDERS OF AIRGAS ARE URGED TO READ THESE AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of these documents (if and
when available) and other documents filed with the SEC by Air Products through
the web site maintained by the SEC at http://www.sec.gov.
-more-
CERTAIN
INFORMATION REGARDING PARTICIPANTS
Air
Products and certain of its respective directors and executive officers may be
deemed to be participants in the proposed transaction under the rules of the
SEC. Security holders may obtain information regarding the names, affiliations
and interests of Air Products’ directors and executive officers in Air Products’
Annual Report on Form 10-K for the year ended September 30, 2009, which was
filed with the SEC on November 25, 2009, and its proxy statement for the 2010
Annual Meeting, which was filed with the SEC on December 10, 2009. These
documents can be obtained free of charge from the sources indicated above.
Additional information regarding the interests of these participants in the
proxy solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will also be included in any proxy statement and
other relevant materials to be filed with the SEC when they become
available.
FORWARD-LOOKING
STATEMENTS
All
statements included or incorporated by reference in this communication other
than statements or characterizations of historical fact, are forward-looking
statements. These forward-looking statements are based on our current
expectations, estimates and projections about our business and industry,
management’s beliefs, and certain assumptions made by us, all of which are
subject to change. Forward-looking statements can often be identified by words
such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”,
“seeks”, “estimates”, “may”, “will”, “should”, “would”,
“could”, “potential”, “continue”, “ongoing”, similar expressions, and variations
or negatives of these words.
These
forward-looking statements are not guarantees of future results and are subject
to risks, uncertainties and assumptions that could cause our actual results to
differ materially and adversely from those expressed in any forward- looking
statement. Important risk factors that could contribute to such differences or
otherwise affect our business, results of operations and financial condition
include the possibility that Air Products will not pursue a transaction with
Airgas and the risk factors discussed in our Annual Report on Form 10-K,
subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K,
and other SEC filings. The forward-looking statements in this release speak only
as of the date of this filing. We undertake no obligation to revise or update
publicly any forward-looking statement, except as required by law.
# # #
Media
Inquiries:
(Air
Products) Betsy Klebe, tel: (610) 481-4697; e-mail:
klebeel@airproducts.com.
(Sard
Verbinnen & Co)
George
Sard/David Reno, tel: (212) 687-8080.
Investor
Inquiries:
Nelson
Squires, tel: (610) 481-7461; e-mail:
squirenj@airproducts.com.