Japanese gas
5 Sep 2002
BOC and Air Liquide intend to combine their Japanese industrial and medical gases businesses within Osaka Sanso Kogyo (OSK) and Air Liquide Japan (ALJ), creating a new entity that will be named Japan Air Gases.
The transaction is subject to OSK's and ALJ's shareholders' approval and the receipt of formal clearance from the Japanese FTC and the European Commission. It is then expected that the new company will be established in early 2003.
Following the combination of the two complementary businesses, BOC will hold 45% of Japan Air Gases and ALJ 55%. Each company will be equally represented on the Board of Japan Air Gases, which will set strategic direction and approve major decisions.
The electronics equipment business of BOC Edwards in Japan and BOC's interests in the Japan Helium Centre are excluded from the combination. ALJ's engineering and plant construction activities, its interest in silane production, its investments in Korea, Taiwan and China, and Air Liquide Group's R and D centre in Japan are also excluded from the combination.
The new company will be one of the leading industrial gases companies in Japan, with combined sales of some 138 billion yen in 2001. Japan Air Gases will achieve potential synergy benefits estimated at yen 5 billion a year. The transaction is expected to be earnings enhancing for both BOC and Air Liquide by the second year of operation, when a substantial portion of the synergy benefits will have been realised.
