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Air Products and Chemicals to Acquire ACP Europe SA

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Air Products and Chemicals’ new acquisition

On February 15, 2018, Air Products and Chemicals (APD) announced that it entered into a definitive agreement to take over ACP Europe SA. However, APD didn’t disclose the financial aspects of the deal or the expected timeframe to complete the transaction. 

The acquisition is expected to complement APD’s business by strengthening its position in Europe. APD supplies a wide range of industrial gases in 13 European countries.

The takeover of ACP Europe is expected to provide Air Products and Chemicals (APD) with four liquid carbon dioxide production facilities and two dry ice facilities in Europe. ACP’s products are geared toward the beverage, chemical, food, and horticulture businesses.

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Ivo Bols, president of APD’s industrial gases Europe and Africa segment, noted, “We are delighted to announce this transaction to acquire ACP. We are committed to invest in our core industrial gas business where it creates significant value for our shareholders, and the acquisition of ACP fulfils that criteria. ACP has a quality, well-run European CO2 business that like Air Products, prioritizes safety above all else.”

Stock update

Air Products and Chemicals (APD) stock gained 3.5% and closed at $163.63 for the week ended February 16, 2018. The substantial gains in APD’s stock price helped the stock reverse its 100-day moving average trend. APD traded 1.6% above its 100-day moving average price of $161.00. 

However, APD stock has declined 0.30% on a year-to-date basis. Analysts projected a target price of $183.60, which implies a return potential of 12.2% over the closing price of February 16, 2018. APD’s 14-day relative strength index (or RSI) of 51 indicates that the stock is neither overbought nor oversold.

Investors can indirectly hold APD by investing in the Materials Select Sector SPDR ETF (XLB), which invests 5.2% of its portfolio in APD. XLB gained 3.5% for the week. 

XLB also provides exposure to DowDuPont (DWDP), Monsanto (MON), and LyondellBasell (LYB), which had weights of 23.1%, 7.8%, and 5.2%, respectively, on February 16, 2018.

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