Air Products withdraws $1.5 bn takeover bid for China's Yingde Gases

Air Products and Chemicals Inc yesterday said that it would withdraw its proposed $1.5 billion takeover bid for China's Yingde Gases because "it is not in the best interests of Air Products' shareholders."

The withdrawal will see Hong Kong-based private equity firm PAG Asia as the sole bidder for China's largest producer of industrial gases.

In December 2016, Air Products had tabled a non-binding offer to buy Yingde for $1.5 billion in cash, subject to conducting due diligence before firming the offer.

PAG had matched the Air Products offer of as much as HK$6 per share of Yingde.

The withdrawal also comes a week after Yingde's ousted chairman Zhao Xiangti sold his 190 million shares to PAG Asia, which now holds around 47.2 per cent of Yingde after the company's co-founders Mark Sun Zhongguo and Trevor Strutt pledged to submit their shares to PAG Asia bid.

The three founders of Yingde had been embroiled in a bitter feud for control of the Shanghai-based company since last November, which resulted in shareholders asking Zhao to step down.

Yingde has an enterprise value of about $2.25 billion, including a market value of about $814 million and net debt of about $1.45 billion, according to Bloomberg.

Air Products is a supplier of industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services.

Founded in 1940, Air Products is a key player in semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives in key growth markets with operations in over 40 countries employing 18,900 people globally.

Air Products, whose customers include Apple and Intel, is the world's largest hydrogen producer and has a profitable packaged gas business in Europe and other key international markets, but is a small player in the domestic market, where its smaller rival Airgas dominates the US market.