BOC seeks pounds 15bn deal with French gas giant

BOC, THE industrial gases group, is set to announce to the Stock Exchange this morning that merger talks begun last month with Praxair of the United States have been abandoned.

It is understood that the breakdown of talks could rapidly be followed by the Surrey-based company receiving an approach from France's Air Liquide - a move that would create the world's largest industrial gases group, with a market value exceeding pounds 15bn.

Danny Rosenkranz, chief executive of BOC, is thought to favour a tie- up with the French group - the industrial gas sector's global leader. Matching BOC's substantial operations in North America and Asia with Air Liquide's pan-European operations would create an industry powerhouse and could drive further consolidation in the sector.

The executive culture and management structure of BOC and Air Liquide are seen as helping rather than hindering a merger.

Alain Joly, the head of Air Liquide, recently expressed a desire to make his company more Anglo-Saxon by looking to boost shareholder value after a period of market underperformance.

It is expected that the top posts in the combined group would be split, with Mr Joly becoming chairman prior to his retirement in 2001, leaving Mr Rosenkranz in the chief executive's slot.

People familiar with the situation said that Air Liquide and Air Products, another US gases group, were jolted into action when the BOC-Praxair talks became public last month. But hopes of an Anglo-American linkup involving Praxair floundered at the weekend over management control and other issues, they said.

It is also understood that a possible dual approach from Air Liquide and Air Products, designed to carve up BOC between them, has been rejected in advance by the British firm. Such a deal would have faced close regulatory scrutiny, particularly in the US. BOC would be left irredeemably damaged should a joint bid come unstuck, according to one source.

BOC's board is believed to favour a renewed approach from Air Liquide. "The ball is very firmly in Air Liquide's court," said one insider. "Air Products' presence is not welcome. But a new Air Liquide approach alone would be welcome."

A tie-up would create a diversified gas giant with annual sales of pounds 7.5bn. In 1998, BOC had sales of pounds 3.3bn and rang up pretax profit of pounds 247.2m.

Its shares closed up 18p at an all-time high of 1,231p on Friday, up nearly 50 per cent from a year ago. That values the company at pounds 6.0bn.

Industrial gases are used in a wide range of manufacturing and service applications and processes, ranging from electronics factories to chemical plants and hospitals. Analysts say the sector is ripe for consolidation.

About 55 per cent of Air Liquide's sales are in continental Europe and 30 per cent in North America. BOC's sales are divided roughly equally between North America, Asia-Pacific and the UK.

The British company has been streamlined over the past 18 months with the elimination of 5,000 jobs, a process that is forecast to yield annual cost savings of pounds 120m. BOC has also cut gearing substantially with the pounds 640m sale of its Ohmeda healthcare business.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Doctor and Clara have their first real heart to heart since he regenerated in 'Deep Breath'
TV
Arts and Entertainment
James Hewitt has firmly denied being Harry’s father
arts + ents
Arts and Entertainment
Jamie Oliver
filmTV chef Jamie Oliver turned down role in The Hobbit
News
The official police photograph of Dustin Diamond taken after he was arrested in Wisconsin
peopleDownfall of the TV star charged with bar stabbing
PROMOTED VIDEO
Life and Style
tech
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
tvReview: Top Gear team flee Patagonia as Christmas special reaches its climax in the style of Butch and Sundance
News
people
Sport
Ashley Barnes of Burnley scores their second goal
footballMan City vs Burnley match report
News
news
Arts and Entertainment
Peter Mayhew as Chewbacca alongside Harrison Ford's Han Solo in 'Star Wars'
film
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Man of action: Christian Bale stars in Exodus: Gods and Kings
film
Life and Style
Apple showed no sign of losing its talent for product launches with the new, slightly larger iPhone 6 making headlines
techSecurity breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Arts and Entertainment
Catherine (Sarah Lancashire) in Happy Valley ((C) Red Productions/Ben Blackall)
TV
Arts and Entertainment
Clueless? Locked-door mysteries are the ultimate manifestation of the cerebral detective story
booksAs a new collection of the genre’s best is published, its editor explains the rules of engagement
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

A timely reminder of the bloody anniversary we all forgot

A timely reminder of the bloody anniversary we all forgot

Who remembers that this week we enter the 150th anniversary year of the end of the American Civil War, asks Robert Fisk
Homeless Veterans appeal: Former soldiers pay their respects to a friend who also served

Homeless Veterans appeal

Former soldiers pay their respects to a friend who also served
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing

Scarred by the bell

The downfall of the TV star charged with bar stabbing
Why 2014 was a year of technological let-downs

Why 2014 was a year of technological let-downs

Security breaches and overhyped start-ups dominated a year in which very little changed (save the size of your phone)
Cuba's golf revolution: But will the revolutionary nation take 'bourgeois' game to its heart?

Will revolutionary Cuba take 'bourgeois' golf to its heart?

Fidel Castro ridiculed the game – but now investment in leisure resort projects is welcome
The Locked Room Mysteries: As a new collection of the genre’s best is published, its editor Otto Penzler explains the rules of engagement

The Locked Room Mysteries

As a new collection of the genre’s best is published, its editor explains the rules of engagement
Amy Adams on playing painter Margaret Keane in Tim Burton's Big Eyes

How I made myself Keane

Amy Adams hadn’t wanted to take the role of artist Margaret Keane, because she’d had enough of playing victims. But then she had a daughter, and saw the painter in a new light
Ed Richards: Parting view of Ofcom chief. . . we hate jokes on the disabled

Parting view of Ofcom chief... we hate jokes on the disabled

Bad language once got TV viewers irate, inciting calls to broadcasting switchboards. But now there is a worse offender, says retiring head of the media watchdog, Ed Richards
A look back at fashion in 2014: Wear in review

Wear in review

A look back at fashion in 2014
Ian Herbert: My 10 hopes for sport in 2015. Might just one of them happen?

Ian Herbert: My 10 hopes for sport in 2015

Might just one of them happen?
War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?