Messer Nears GIC Stake Sale at Over €12 Billion Valuation

(Bloomberg) -- Messer SE secured an investment from GIC Pte that values the industrial gas maker at more than €12 billion ($12.9 billion) including debt, marking the second mega deal in as many months for a century-old, family-owned company in Germany.

Bad Soden-based Messer announced the investment from the Singaporean sovereign wealth fund in a statement on Tuesday that confirmed an earlier Bloomberg News report. While financial terms were not disclosed, people with knowledge of the matter said GIC is paying around €2 billion for a less than 25% stake in Messer.

“The global market for industrial gases is attractive and growing,” Henry Ormond, head of private equity Europe at GIC, said in the statement. “It’s a durable industry and will see new opportunities from the green transition in the long term.”

Messer is using the proceeds to help buy full control of Messer Industries GmbH, a joint venture it runs with private equity firm CVC Capital Partners. The deal to buy out CVC gives Messer Industries a value of about €8 billion, the people said, asking not to be identified discussing confidential information. The two parties agreed to create the JV in 2018 to buy North and South American assets being sold by Linde to secure antitrust approval for its $46 billion merger with Praxair Inc. Messer Industries also houses assets in Western Europe. 

“We successfully brought together and further developed the various parts of Messer Industries, which are firmly established in their respective markets,” Messer CEO Bernd Eulitz said in the statement. “Now is the ideal time to fully integrate Messer Industries with all its national entities.”

A deal between GIC and Messer, which is celebrating its 125-year anniversary, marks the second marquee investment in a family-owned German industrial group in quick succession. In April, 106-year old manufacturing company Viessmann agreed to sell most of its business to US air conditioner maker Carrier Global Corp. for about €12 billion, a rare purchase of a so-called Mittelstand company. 

While taking control of the JV and bringing on an external investor could pave the way for an IPO of Messer down the road, Chairman Stefan Messer has repeatedly said he prefers to keep the family-owned company private.

Founded in 1898, Messer’s operations have around 11,000 employees globally and reported about €4.2 billion of sales in 2022. The company, which focuses on industrial, medical and specialty gases, competes with the likes of Air Liquide SA and Air Products & Chemicals Inc. Beyond industrial gases, it also builds cutting systems and gas control equipment.

Bloomberg News reported in January that Messer was in talks to raise funds from external investors and had sounded out sovereign wealth funds and buyout firms, and then earlier this month that GIC had emerged as the frontrunner. The value of industrials deals globally stands at $152 billion this year, according to data compiled by Bloomberg, down around 38% on the same point in 2022.

GIC manages about $690 billion in assets, according to research firm Global SWF. The wealth fund has been a prolific investor in recent years, often leveraging relationships with private equity firms to partner on transactions. 

In 2021, it invested alongside Blackstone Inc., Carlyle Group Inc. and Hellman & Friedman to buy Medline Industries Inc. in one of the largest buyouts ever. That same year, it acquired 30% stake in Cetin Group BV, which operates phone and data networks in central and eastern Europe, from the heirs of late Czech billionaire Petr Kellner.

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