BOC agrees to Linde takeover, creating gas giant

March 7, 2006 – BOC Group’s board has reconsidered Linde’s sweetened offer and agreed to be acquired by the German gas company for about $14.4 billion (GBP 8.2 billion). With combined annual revenues of some $14.3 billion, the merged companies will surpass Air Liquide to become the world’s largest gas supplier.

Linde’s offer of roughly GBP 16/share, up from the GBP 15/share it had originally offered in January, represents a 39% premium to the BOC price when it made its first offer, and a relatively rich 21x current year earnings. Antitrust approval is expected due to little product overlap, but the companies expect the deal to close in September.

During the conference call announcing the deal, Linde president and CEO Wolfgang Reitzle indicated strategic options are being evaluated for noncore businesses, which could include plans for BOC Edward’s semiconductor equipment business.

Wiesbaden-based Linde gets an entry into the electronics gas market with BOC’s 10% global market share, and hopes to expand that into continental and Eastern European markets where it has a stronger presence than the UK company. “Countries where Linde is currently present will benefit from BOC’s strong thought leadership and footprint in electronics gases,” said Reitzle.

Although Linde has only a tiny 1% market share in the electronics segment, it has significant share in gases for general manufacturing and healthcare. Reitzle said the two companies combined would have leading market share in the total gas cylinder and bulk gas segments, and would be number two in the on-site gas supply business.

More significantly, Linde expands its geographic reach into fast-growing markets with the acquisition of the UK company’s Asian facilities. The companies have very little geographic overlap, with Linde stronger in Europe (23% market share, compared to BOC’s 9%), and BOC stronger in Asia (10% share, to Linde’s 2%). Combined, they will have top share in both those regions.


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