Big Three Industries said Tuesday that it has agreed to be acquired by a French company, L’Air Liquide S.A., for $1.05 billion.
The companies, both of which are major suppliers of industrial gases, said L’Air Liquide agreed to pay $29 a share for Big Three’s 36.3 million common shares outstanding.
The announcement sent Big Three’s stock up $4.50 a share to $28.62 1/2 on the New York Stock Exchange. The stock also led the NYSE’s active list, with more than 5 million shares changing hands.
L’Air Liquide’s offer, which was approved by Big Three’s directors, is conditioned on at least 24.5 million, or 67.5%, of Big Three’s stock being validly tendered to L’Air Liquide, the companies said.
Big Three is a leading producer of industrial gases used in the chemicals, energy and electronics industries. For example, the company sells nitrogen and carbon dioxide that oil companies use to enhance their drilling efforts.
Big Three also provides energy equipment and services and sells welding equipment and supplies to the construction and manufacturing industries.
In 1985, Big Three’s profit skidded to $14.5 million from $56.7 million in 1984 largely because of a $42.3-million loss related to a writedown in the value of the company’s energy group. Annual sales rose to $834.2 million from $775.7 million in 1984.
In the first half of this year, sluggishness in the energy industry continued to hold down Big Three’s earnings, which inched up to $24.4 million from $23.9 million a year earlier. Sales fell to $368.5 million from $406.8 million.
L’Air Liquide, whose 1985 sales totaled about $2.25 billion, is one of the world’s biggest industrial gas suppliers. It has been operating in the United States since 1969 through its American Air Liquide Inc. subsidiary.
L’Air Liquide said it was particularly attracted to Big Three because the Houston-based company would give it a significant and relatively low-cost source of argon, a gas used in the manufacture of specialty steel and semiconductors.
As part of the companies’ agreement, Big Three also granted L’Air Liquide an option, exercisable under certain conditions, to buy 6.72 million, or 18.5%, of Big Three’s common shares for $24.12 1/2 apiece, or $162.12 million.