Air Products and Chemicals Aims to Acquire Yingde Gases



Air Products and Chemicals targets Yingde Gases

On January 8, 2017, Air Products and Chemicals (APD) said that it “has submitted a letter (the “Proposal Letter”) to Yingde Gases Group Company Limited (“Yingde”) setting forth a preliminary, non-binding indication of interest to acquire all of the outstanding shares of Yingde, subject to the satisfaction of certain conditions described in the Proposal Letter.”

As of now, APD hasn’t said how much it is willing to pay to acquire Yingde Gases. With Yingde having a market cap of $1 billion and an enterprise value of $2.3 billion, APD’s successful acquisition of Yingde could help it have a strong hold in the region. This move has come amid Praxair’s (PX) acquisition of German-based Linde for $35 billion to become the biggest industrial gas supplier company.

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Air Products and Chemicals’ stock price

On January 13, 2017, APD stock closed at $145.35 and rose 0.7% for the week. APD outperformed the Materials Select Sector SPDR Fund (XLB), which went up 0.5% during the same period. APD stock traded 3.4% above its 100-day moving average price of $1,140.51. In 2016, the stock returned 19.5%. APD traded 37.0% above its 52-week low price of $106.05 and 3.4% below its 52-week high price of $150.45.

Alternatively, investors can hold APD indirectly by investing in the Materials Select Sector SPDR Fund, which invests 5.6% of its portfolio in APD as of January 13, 2017. The other top holdings of the fund include DuPont (DD) and Dow Chemical (DOW) with weights of 11.6% and 11.4%, respectively.


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