After Passing on Praxair, BOC Flirts With Air Liquide and Air Products

Like the girl in the song, BOC Group plc (London) just can't say no. But it seems to have a hard time saying yes to new proposals for a corporate marriage.

The company, which had 1998 sales of $5.4 billion, conceded it is in takeover talks with Air Liquide SA (Pairs, France) and Air Products & Chemicals Inc. (Allentown, PA), which have mounted a joint takeover bid.

"The proposal isn't satisfactory in a number of important respects but the board has authorized the exploration of these issues to see if they can be addressed," the company says in a statement.

In June, BOC rejected a merger bid from two unnamed competitors. Although BOC never identified the suitors, speculation on Wall Street named Air Liquide and Air Products as the likely candidates. Some reports put the value of the deal at $11.5 billion.

In May, $4.8 billion Praxair Inc. (Danbury, CT) approached BOC with a merger bid. The combined entity would have been the largest air chemicals company in the world with roughly a 30% share of the market. BOC, however, rejected Praxair's bid when the parties couldn't work out how their respective managements would share power.

BOC is the dominant gas producer in the United Kingdom, with a roughly 60% share of the market. It is less of a factor on the Continent, but does a significant business in Asia and Africa. The company's pretax profits fell 45% in fiscal year 1998, which ended in September, due in large part to the slowdown of Asian economies.

In 1998, Air Liquide net profits rose 10.9%, to $525 million on a 4% rise in sales to $6.2 billion. About two-thirds of its income come from sales of industrial gases. The company did 64% of its business in Europe, 26% in the Americas, 7% in Asia, and 2% in Africa.

Air Products also performed well in 1998. Net income rose 14%, to $547 million, on a 6% rise in sales to $4.9 billion. Gases accounted for 69% of the company's sales in 1998.

By Alan S. Brown