The gas group could soon get the sovereign wealth fund GIC as a new partner
(Photo: obs)
Frankfurt, Dusseldorf The German industrial gases manufacturer Messer wants to bring the sovereign wealth fund GIC Aus Singapore on board as a new shareholder. Both companies are in talks to sell a minority stake of around 20 percent worth two billion euros, according to several people familiar with the matter. The deal could be announced in the coming weeks. Messer declined to comment. GIC was initially unavailable.
The family company Messer wants to use the money to regain complete control over its operational business. Together with the financial investor CVC, the group operates a large joint venture in which the businesses in North and South America are bundled. Messer’s aim is now to buy CVC out of this joint venture. The investor holds 48 percent of the shares. He declined to comment.
Family businesses versus corporations
As the largest private supplier in the industrial gases sector, the Messer Group competes with the “Big Three” – the listed companies Linde, Air Liquide from France and Air Products from the USA.
For entrepreneur Stefan Messer, who now chairs the Supervisory Board, the deal would be a breakthrough in his long-awaited goal: when the joint venture was concluded in 2019, he had already emphasized that all global businesses should be brought back completely into family hands as quickly as possible. Now, after four years, the opportunity presents itself – but Messer needs money for it.
That should now come from the sovereign wealth fund GIC. According to financial sources, CVC could receive a multiple of the purchase price of 625 million euros for its share in the joint venture. The entire Messer Group would be valued at a good ten billion euros in the deal.
Linde parts for knives
In 2018, Messer took over almost all of its competitor Linde’s North American business, as well as several locations in Latin America. Linde had to sell these activities in the course of its merger with the US gas group Praxair for antitrust reasons. Since Messer could not handle the acquisition on its own, the Hessian company brought CVC on board.
The family business paid almost three billion euros for the activities in 2018. The financial investor contributed the necessary equity for the takeover, and Messer contributed its Western European business to the joint venture as an asset.
Messer had grown significantly as a result of the Linde transaction. Before the acquisition, Messer had annual sales of 1.3 billion euros, and Linde’s American business added 1.7 billion euros. Last year the group made 4.2 billion euros in sales with an annual surplus of 346 million euros
More: Is the Dax doing better without its heavyweight Linde?