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Praxair Signs New Deal with GlobalFoundries to Supply Nitrogen

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Praxair’s new deal

On October 17, 2017, Praxair (PX) announced that it has entered into a long-term agreement with GlobalFoundries in Malta, New York. Praxair will build a new facility at the Malta fabrication plant to supply nitrogen. Praxair didn’t give any financial details of the deal. It also didn’t specify when the new plant will be completed or when it will begin sending the supply of nitrogen to GlobalFoundries.

GlobalFoundries is a semiconductor company that caters to technology companies involved in chip manufacturing by providing design, development, and fabrication services.

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Kevin Foti, president of Praxair’s U.S. Industrial Gases, said, “As a result of this agreement, two companies with significant local New York operations are coming together and spurring growth in their businesses and the local economy as well. Our reliable supply of nitrogen and industry expertise will support GLOBALFOUNDRIES’ position as one of the leading semiconductor fabs in the world.”

Stock performance

Praxair stock remained positive, rising 0.70% for the week ended October 20, 2017. The stock closed at $143.14 and traded 6.3% above its 100-day moving average of $134.70, indicating an upward trend. On a year-to-date basis, the stock has risen 22.1%. It’s trading very close to analysts’ consensus target price of $143.93. Praxair’s relative strength index level of 66 indicates that the stock is neither overbought nor oversold.

Investors looking to invest in Praxair indirectly can invest in the Vanguard Materials ETF (VAW), which has invested 4.4% of its portfolio in Praxair. Other holdings of the fund include Monsanto (MON), LyondellBasell (LYB), and Albemarle (ALB) with weights of 5.9%, 3.7%, and 1.7%, respectively, as of October 20, 2017.

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