Radnor-based Airgas bought by France's Air Liquide for $13.4 billion

In a deal worth nearly $1 billion to founder Peter McCausland, Airgas Inc., a Radnor distributor of industrial gases and related goods, has agreed to a $10.3 billion takeover by French giant Air Liquide, the two companies said Tuesday.

The deal comes five years after McCausland survived a bitter takeover fight with Allentown's Air Products & Chemicals Inc., which wanted to buy Airgas for as much as $5.9 billion, or $70 a share, before giving up in February 2011 after a court loss.

Paris-based Air Liquide agreed to pay Airgas shareholders $143 a share, a 50 percent premium to Airgas' close Thursday, the last day of trading before speculation about a deal started driving Airgas shares up. Airgas shares closed at $137.35 on Tuesday, up $31.17, or 29 percent

Including debt, the deal is worth $13.4 billion, according to Air Liquide, which has a corporate hub in Houston, a research and development center in Newark, Del., and operations in Bucks County.

It was not clear what impact the sale would have on Airgas' Radnor offices, where 250 work.

Air Liquide plans to trim more than $300 million in costs from the combined operations. The company employs more than 50,000, about 10 percent of them in the United States. Airgas employs 17,000.

On Tuesday, McCausland was traveling and not immediately available for comment, an Airgas spokesman said.

In a statement, Benoît Potier, chairman and chief executive of Air Liquide, and McCausland, now Airgas' executive chairman, called the two firms complementary.

With $20.4 billion in revenue last year, Air Liquide is a major global producer of oxygen, nitrogen, and hydrogen for industry and health care.

Airgas is also a producer, but its emphasis is on distribution to smaller customers through a network of 900 branches nationwide and 300 plants where gas cylinders are filled.

Airgas had $5.3 billion in revenue in the year ended March 31. Its biggest markets were manufacturing and metal fabrication, but it also has significant chunks of business in commercial construction, life sciences, and health care.

"This acquisition increases our geographic reach in the resilient U.S. market, and offers continuous growth opportunities," Potier said. About half of Air Liquide's sales last year were in relatively slow-growing European markets.

Potier may be optimistic about the long-term prospects of the U.S. market, but in a conference call on quarterly earnings last month, McCausland said "business conditions remained sluggish."

"The strength of the U.S. dollar, low oil prices, and relatively slower global demand continued to be headwinds for our customers," McCausland said.

On Monday, amid speculation that an Airgas deal was in the works, Laurence Alexander, a Jefferies analyst who has followed the company for years, was skeptical. He said he expected "Airgas shares to struggle near-term until there is stronger evidence of a reacceleration in U.S. industrial production."

After outpacing the gains of the Standard & Poor's 500 stock index since winning the takeover fight with Air Products, Airgas shares have been in a slump since March, falling 20 percent while the S&P 500 fell just 3 percent. Alexander predicted in his note to investors Monday that Air Liquide might pay $141.78 for Airgas if it were to make an offer.

McCausland, a lawyer who founded the company in 1982 with the purchase of a Connecticut gas distributor, has since completed more than 400 acquisitions to build the largest U.S. firm of its kind.

"We are excited about the prospects of integrating these two businesses to create the largest industrial gas company in the world," he said in the joint statement.

Both boards have approved the deal, but Airgas shareholders have to vote on it. It must also pass antitrust review.

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