APD Acquires Shell’s Coal Gasification Business



Air Products and Chemicals’ acquisition

On May 7, Air Products and Chemicals (APD) completed the acquisition of Shell’s coal gasification Technology licensing business. Air Products and Chemicals announced the acquisition on January 9. However, the company didn’t disclose the deal’s financial terms. The acquisition will likely enhance Air Products and Chemicals’ ability in syngas and provide turn-key gas sales. As a result of the acquisition, Air Products and Chemicals’ revenue will likely increase in the upcoming quarter.

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Seifi Ghasemi, Air Products and Chemicals’ chairman, president, and CEO, said, “Air Products now has immediate access to Shell’s proven technology and a successful business, with that technology already in place at nearly 200 gasification systems delivering syngas around the world. Beyond a strong operating base, we now have a robust technological foundation that builds on our core focus supplying the full range of industrial gases to our customers.”

In another development, Air Products and Chemicals announced the expansion of its Indian operations by opening a world-class engineering center in Pune. The center will act as an engineering, procurement, construction innovation hub for the company’s operations in India and globally.

Stock prices remained positive for the week

The positive developments kept Air Products and Chemicals stock positive. Air Products and Chemicals gained 2.2% and closed at $166.29 for the week ending May 11. The gains helped Air Products and Chemicals reverse its 100-day moving average trend. The company traded 1.2% above the 100-day moving average price of $164.40, which indicates positive strength in the stock. On a year-to-date basis, the stock has risen 0.5%. Analysts appear to be bullish on the stock. Analysts have recommended a target price of $185.4, which implies a return potential of 11.5% from its current price. Air Products and Chemicals’ 14-day relative strength index is at 57, which suggests that the stock isn’t overbought or oversold.

Investors looking to hold Air Products and Chemicals indirectly can invest in the Materials Select Sector SPDR Fund (XLB), which gained 1.9% for the week. XLB has invested 5.6% of its portfolio in Air Products and Chemicals. The fund also provides exposure to Monsanto (MON), Praxair (PX), and LyondellBasell (LYB) with weights of 8.5%, 7.0%, and 5.6%, respectively, as of May 11.


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