Air Liquide (AI) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets South Korea's rapidly growing industrial gas market, expected to double by 2035 and become the second largest in Asia within 10 years, driven by strong manufacturing and electronics sectors.

• Complements existing operations with a strong national footprint, 60 plants, 220 km of pipeline networks, and a diversified portfolio, especially in electronics, clean energy, mobility, and Bio-Pharma.

• DIG Airgas brings a backlog of nearly 20 secured projects, enhancing growth prospects and providing a platform for innovation and future growth in advanced manufacturing and clean mobility.

• The deal positions the combined entity as a leader in Asia and globally in electronics, leveraging innovation and technology for future growth sectors like AI and clean energy.

• Reinforces long-term commitment to South Korea’s industrial and energy transition ecosystem.

Financial terms and conditions

• DIG is valued at KRW 4.6 trillion (EUR 2.85 billion), representing a 20.2x 2024 EBITDA multiple, dropping to 16x post-backlog and 14.8x post-backlog and cost synergies.

• The acquisition is financed via a bridge loan, to be refinanced by bond issues, maintaining an A-category credit rating.

• Transaction structured on a locked-box basis as of 31/12/2024.

• Expected to add +2% to group sales and be earnings accretive one year after integration, with ROCE remaining above 10%.

• €240m investment backlog secured.

Synergies and expected cost savings

• EUR 240 million in secured investments from 19 projects, expected to deliver over EUR 60 million additional EBITDA by 2030.

• Minimum EUR 16 million annual EBITDA from cost synergies by 2030, through procurement, scale, and operational efficiencies.

• Growth synergies include leveraging technology, product innovation, and G&A optimization, with productivity improvements and extended reach beyond Korea.

• Highly executable synergies expected due to complementary operations, further reducing the effective acquisition multiple.

• Roll-out of innovative product offerings and technology expected to improve productivity.