BOC on the brink as competitors combine
15 Jan 2000
It looks as though venerable British industrial gases group BOC could be close to losing its independence. The company has rejected a £7billion joint takeover bid from its two major competitors, France's Air Liquide and the US firm Air Products, and chief executive Danny Rosenkranz is believed to be willing to hold merger talks with either of the companies in order to save BOC from break-up.
Both Air Liquide and Air Products had made individual bids for BOC, as had the fourth industrial gases major, Praxair; however, BOC rejected all of them. The combined Franco-American bid, which at £14.20 per share valued BOC at £7billion, came because Air Liquide and Air Products felt they were being railroaded into a bidding war, analysts believe. However, BOC opted to reject the bid, commenting that it was `not in the best interests of BOC's shareholders, customers or employees.'
Rosenkranz is now under pressure to come up with a solution that will keep BOC intact. One option that remains is to reopen talks with Praxair. The US firm's original bid, back in May, failed after the companies could not agree on the makeup of the merged board; Praxair chairman William Lichtenstein demanded a majority presence on the board and the executive chairmanship for himself, which was unpalatable for BOC.
The company may also choose to stay European, and merge with Air Liquide. Either option would be tempting to the companies involved; they would create the world's largest industrial gases concern.
