Closing of the Messer Griesheim acquisition

On May 6, 2004, the Air Liquide Group completed its acquisition of Messer Griesheim’s industrial gas activities in Germany, the United Kingdom and the United States, after obtaining the green light from antitrust authorities in Europe and the United States and finalization of financing by the Messer family for the retained businesses. The Group completed this major acquisition, announced on January 20, 2004, within a very short time and thus without any penalties. The purchase represents an investment of 2.7 billion euros, before divestitures and after adjustment. In line with initial estimates, the net sales acquired after divestitures will be around 800 million euros. The divestitures required by the antitrust authorities amount to 23 % of the total acquired sales. These divestitures will be completed as quickly as possible; several industrial companies have already indicated an interest in the businesses Air Liquide will be selling in Germany and the United States. The acquired businesses and their personnel are of high quality and effectively complement those of the Group. The current profit margin and cash flow levels of the combined operations will be improved by synergies estimated at about EUR 100 million, which means the acquisition will be earnings accretive in the first twelve months. Integration teams are already in place, and the senior management is in the process of being appointed. Mr Klaus Schmieder, currently Chairman of the Management Board of Messer Griesheim, will join the Air Liquide Group where he will have an important assignment. The acquisition will be entirely debt financed and funded from the financial markets and bank loans. The Group’s balance sheet will remain very solid given its strong dependable cash flow generation, which is further strengthened by the acquisition. Air Liquide‘s capacity for investment and external growth will thus remain intact. The dividend policy will also be maintained. Benoît Potier, Chairman of Air Liquide’s Management Board, said: “This acquisition in three large countries is a major and strategic step forward for Air Liquide. The geographic presence of our activities combined with that of Messer Griesheim’s, the strong heritage which each partner brings to the deal, and our recognized expertise will give the Group a new solid and enlarged base. We will be at the heart of major European markets and will enhance our national coverage in the United States, particularly in one of the country’s key industrial zones. Around the world, the combined company will enable us to provide customers with a broader range of high quality products and services. We will also leverage our productivity programs and pursuit of growth opportunities. I would like to congratulate the teams involved in this project, especially those responsible for establishing and maintaining a constructive work with the European Commission and U.S. Federal Trade Commission : they ensured the success of this project, which is so important for the Group’s future. To be the world leader in industrial and medical gases, recognized for our innovative spirit and our ability to deliver sustained, profitable growth – this is our objective. This acquisition gives the Group new momentum to accelerate its development strategy.”