Air Liquide

Air Liquide announced the acquisition of DIG Airgas, a Korean gas player for €2.8bn for €550m in sales (5.1x sales). EV/EBIOTDA paid is 20.2x down to 14.8x post synergies, ie only slightly more than Air Liquide's. 

DIG Airgas has strong positions in the semiconductor business (Samsung, Hynix) with a strong growth potential. The company has 220km of pipes, 60 plants and 550 employees.

The acquisition will add €550m in sales (c 1.5% of additional sales) and c 2% in EBITDA. The ratios are roughly in line with those of Air Liquide. 

The deal is expected to close by early 26 and will increase Air Liquide's market share in Korea by 10%; we don't foresee significant antitrust or competition issues stemming from that deal. 

Air Liquide is increasing its presence in South Korea, which is interesting as the country is set for more growth with the expected significant investment plan in Semiconductors (notably for AI). 

The potential for external growth is now very limited for giants like Air Liquide or Linde and this deal even though its limited size (at least when compared to the size of Air Liquide) is good news. Air Liquide's equity story is one of organic growth story (i.e. world GDP +) and operational efficiency (including cost cutting but not only). The fundamental quality of Air Liquide is undeniable, but valuation now seems a bit rich to my liking. Stock trades on a PE 25 of 26.3x and PE26 of 23.9. 

Likewise, EV/EBITDA 25 and 26 stand at 13.8x and 12.6x, which is expensive compared to historical ratios. Yet it remains substantially cheaper than Linde (listed in the US) but from a fundamental standpoint, our expert believes it is too late in his opinion to build a stake in Air Liquide.