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Gas maker Air Products Korea put on sale for around $3.6 bn

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Air Products Korea’s factory in Ulsan (Courtesy of Air Products)

US industrial gas maker Air Products and Chemicals Inc. has put a 100% stake in its South Korean unit up for sale, which is expected to be around 5 trillion won ($3.6 billion), investment banking sources said on Wednesday.

Air Products and Chemicals has selected Citigroup Global Markets Inc. as a lead manager to sell the second-largest industrial gas supplier in Korea and complete transactions by the end of this year, sources added.

The US headquarters and its affiliates Air Products Manufacturing Corp. and Air Products International respectively own 33.9%, 24.5% and 41.6% stakes in the Korean unit Air Products Korea Inc. Air Products and Chemicals plans to use new proceeds for investment in its blue hydrogen business, according to sources.

Korean steel giant POSCO Group, which is building domestic industrial gas facilities, and private equity funds such as Hahn & Company and MBK Partners may join the bid for the acquisition, banking sources said.  

Air Products Korea ranked second in the Korean industrial gas market with a 22.2% share last year, following Linde Korea Co. which made up 30.1%. The top two players in Korea, DIG Airgas Co. and AirFirst Co. account for about 90% of the country’s industrial gas market.

Air Products Korea posted 136.6 billion won in operating profit and 765.1 billion won in revenue between October 2022 and September 2023. Its earnings before interest, taxes, depreciation and amortization (EBITDA) for the same period amounted to 232.8 billion won.

The sale price could be around 5 trillion won, given that BlackRock’s purchase of AirFirst last year reached about 20 times AirFirst’s EBITDA, market insiders said.

Air Products Korea refines and supplies various chemical elements such as nitrogen, helium and oxygen to plants of major companies such as Samsung Electronics Co., Samsung Display Co. and SK Hynix Inc. for industrial use.

It is the first Korean gas maker to have provided Samsung’s semiconductor facilities with industrial gas on a large scale. The company has also supplied gases to Samsung’s fifth semiconductor plant in Pyeongtaek in Korea, which the chipmaker started building last year.

By Jun-Ho Cha

chacha@hankyung.com

Jihyun Kim edited this article.

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