UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) 13 July 1999
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Air Products and Chemicals, Inc.
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(Exact name of registrant as specified in charter)
Delaware 1-4534 23-1274455
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(State of other jurisdiction of incorporation) (Commission file number) (IRS Identification number)
7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 481-4911
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Item 5. Other Events.
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The registrant announced today that its board and the boards of L'Air
Liquide S.A.("Air Liquide") of France and The BOC Group plc have agreed to the
terms of a recommended offer under which it and Air Liquide will acquire BOC, a
leading British industrial gases company, for UK(pound)14.60 per share in cash,
or a total of approximately $11.2 billion. The offer will formally commence in
the United Kingdom upon the receipt of necessary regulatory clearances, which
are expected within six months.
For the registrant, the transaction represents a unique opportunity to
acquire attractive, complementary assets that will increase its size and scale
to compete around the world and extend its presence in high growth areas,
advancing its strategy of building a leading global industrial gas company.
Air Products expects the transaction will enhance its cash earnings per share
(earnings plus amortization, transaction fees and costs per share) from the
first full year following completion of the offer and will be accretive to
earnings per share post goodwill amortization at the end of year two. The
registrant will contribute approximately $5.9 billion in cash to the
transaction, funded through debt financing. Air Products has committed funds for
the transaction through a credit facility provided by The Chase Manhattan Bank.
"This transaction will create value for Air Products' shareholders,"
said Hap Wagner, Chairman and CEO of Air Products. "It is consistent with our
strategic focus on leading positions where key products, markets and geographies
intersect. It increases our focus on high growth areas, particularly in Asia,
and enhances our ability to serve our customers while providing exciting
opportunities for employees around the world."
The registrant and Air Liquide will form a U.K.-based holding company
which will make the offer and have agreed that BOC's operations will ultimately
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be owned in approximately equal shares. Under their agreement, as soon as
practicable following completion of the offer and consistent with obtaining
regulatory and other approval, Air Products will own all BOC operations in
Australia and New Zealand and Air Liquide will own all BOC gases operations in
the U.K. and Ireland. It is expected that in Asia, the registrant will own
significant operations of BOC, including BOC's interests in Singapore, Southern
China and Malaysia and Air Liquide will own substantially all of the BOC
operations in Japan and Thailand. In addition, Air Products and Air Liquide will
each own some of the U.S. businesses of BOC and some of the remaining gases
businesses on a country by country or region by region basis, consistent with
obtaining regulatory and other approvals.
The combination will enable the registrant to serve global customers on
a broader geographic base. In total, following completion of the transaction,
the registrant will have annual revenues approaching $8 billion and assets of
approximately $13 billion. It will expand its operations from 31 to over 50
countries and will supplement Air Products' offerings to the metals, medical and
food sectors around the world and enhance its position in the specialty gases
and HYCO (hydrogen/carbon monoxide) businesses. The registrant will also gain
merchant market capabilities in carbon dioxide in the U.S.
Air Products and Chemicals, Inc. is an international supplier of
industrial gases and related equipment, and selected chemicals. With corporate
headquarters in eastern Pennsylvania's Lehigh Valley, the company has sales of
$5 billion, operations in over 30 countries and 17,000 employees around the
globe.
THIS PRESS RELEASE SHOULD BE READ IN CONJUNCTION WITH THE FULL ANNOUNCEMENT
MADE TODAY BY THE REGISTRANT AND AIR LIQUIDE.
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CAUTION WITH REGARD TO FORWARD LOOKING STATEMENTS
Certain statements in these materials are "forward looking statements"
within the meaning of the United States Private Securities Litigation Reform Act
of 1995. All forward looking statements involve risks and uncertainties and are
based on current expectations regarding important risk factors. Statements
contained herein regarding the consummation and benefits of the proposed
transaction, as well as expectations with respect to future sales, earnings or
cash flows, ability to sustain margins, value obtained related to the
divestiture of assets or businesses, and realization of financial and operating
synergies and efficiencies, are subject to known and unknown risks,
uncertainties, and contingencies, many of which are beyond the control of Air
Products, which may cause actual results, performance, or achievements to differ
materially from anticipated results, performance, or achievements. Factors that
might cause forward looking statements to differ materially from actual results
include, among other things, requirements imposed by regulatory authorities to
permit the transaction to be consummated, unanticipated tax and other costs in
separating the ownership of BOC's businesses and assets, ability to amortize
goodwill over 40 years, overall economic and business conditions, demand for the
goods and services of Air Products or BOC or their respective affiliates,
competitive factors in the industries in which each of them competes, changes in
government regulation, downsizing, or termination, the timing, impact, and other
uncertainties of future acquisitions or combinations within relevant industries,
fluctuations in interest rates and foreign currencies, and the price at which
Air Products would issue additional equity, as well as the impact of tax and
other legislation and other regulations in the jurisdictions in which Air
Products and BOC and their respective affiliates operate.
The full announcement made by the registrant and Air Liquide follows:
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THESE MATERIALS DO NOT CONSTITUTE AN EXTENSION OF A TENDER OFFER INTO THE UNITED
STATES FOR ORDINARY SHARES OR ANY OTHER SECURITIES OF BOC. IT IS INTENDED TO
EXTEND THE OFFER, IF AND WHEN MADE, INTO THE UNITED STATES IN COMPLIANCE WITH
THE PROCEDURAL AND FILING REQUIREMENTS OF THE EXCHANGE ACT AND THE RULES OF THE
SEC THEREUNDER, EXCEPT TO THE EXTENT THAT EXEMPTIVE RELIEF THEREFROM IS GRANTED
BY THE SEC.
13 July, 1999
AIR LIQUIDE AND AIR PRODUCTS
RECOMMENDED CASH OFFER FOR BOC
1. INTRODUCTION
The boards of Air Liquide, Air Products and BOC announce that they have agreed
the terms of a recommended cash offer of 1460 pence per share for the entire
issued and to be issued share capital of BOC. The Offer values the entire
existing issued share capital of BOC at GBP7.2 billion. Subject to certain
pre-conditions, the Offer will be made by Lazard Brothers, Morgan Stanley and
Goldman Sachs on behalf of the Offeror, a special purpose UK company to be
owned equally by Air Liquide and Air Products.
The Offer represents premia of:
- 42 per cent. over the middle market price per BOC Share of 1031.5 pence
at the close of business on 10 May, 1999, the last business day prior
to speculation regarding merger discussions involving BOC; and
- 14 per cent. over the middle market price per BOC Share of 1286 pence
at the close of business on 5 July, 1999, the last business day prior
to BOC's announcement of a renewed approach from Air Liquide and Air
Products.
The Offer represents a price earnings multiple of 27.6 times BOC's earnings per
share before exceptional items of 52.99 pence for the year ended 30 September,
1998 and an enterprise value multiple of 11.4 times BOC's EBITDA of GBP734
million for the year ended 30 September, 1998.
The board of BOC, which has been so advised by J.P. Morgan, considers the terms
of the Offer to be fair and reasonable. In providing advice to the board,
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J.P. Morgan has taken into account the directors' commercial assessments.
Accordingly, the directors of BOC unanimously intend to recommend BOC
shareholders to accept the Offer, as they intend to do in respect of their own
respective beneficial shareholdings.
Lazard and Hoare Govett are acting as financial adviser and broker,
respectively, to Air Liquide, and Morgan Stanley and Goldman Sachs are acting
as financial advisers to Air Products.
J.P. Morgan is acting as financial adviser to BOC. Cazenove & Co. and Deutsche
Bank AG London are acting as joint brokers to BOC.
The bases and sources of certain financial and other information contained in
this announcement are set out in Appendix V and certain terms used in this
announcement are defined in Appendix VI.
2. THE OFFER
The Offer, the terms and conditions of which will be set out in the Offer
Document when issued, will be made on the following basis:
FOR EACH BOC SHARE 1460 PENCE IN CASH
The BOC Shares will be acquired by the Offeror fully paid and free from all
liens, charges, equities, encumbrances, rights of pre-emption and any other
rights of any nature and together with all rights now or hereafter attaching
to them, including the right to receive in full all dividends and other
distributions, if any, declared, made or paid after the date of this
announcement, subject to the following paragraphs.
BOC shareholders will be entitled to retain the second interim dividend of
17 pence per BOC Share declared on 11 May, 1999, expected to be paid on
2 August, 1999 to BOC shareholders on the register on 9 July, 1999.
In addition, Air Liquide and Air Products have also agreed with BOC that, if
the Offer Document has not been posted by 16 November, 1999 (the anticipated
declaration date for the first interim dividend), the board of BOC may declare
a first interim dividend of 15.5 pence per BOC Share payable in February 2000.
This reflects BOC's stated intention, in November 1998, to maintain the first
interim dividend at this level for the foreseeable future. If, after this
announcement, any dividends of an aggregate amount in excess of 15.5 pence per
BOC Share are paid or become payable, the Offeror will have the right to reduce
the consideration for each BOC Share (including each BOC Share represented by a
BOC ADS) by an amount equal to the excess.
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The posting of the Offer Document is subject only to the Pre-Conditions set out
in Appendix I which relate to the obtaining of certain regulatory approvals. In
the event that any of the Pre-Conditions has not been satisfied or waived by the
close of business (London time) on 13 March, 2000, the Offer will only be made
with the agreement of Air Liquide, Air Products and the Panel.
The Offer will extend to all existing issued BOC Shares and to any BOC Shares
which are unconditionally allotted or issued prior to the date on which the
Offer closes (or such earlier date as the Offeror may, subject to the City
Code, decide) including BOC Shares issued pursuant to the exercise of options
under the BOC Share Option Schemes or otherwise.
These materials do not constitute an extension of a tender offer into the
United States for ordinary shares or any other securities of BOC. It is
intended to extend the Offer, if and when made, into the United States in
compliance with the procedural and filing requirements of the Exchange Act
and the rules of the SEC thereunder, except to the extent that exemptive relief
therefrom is granted by the SEC.
The Offer will be subject to the conditions and further terms set out in
Appendix II of this document, the Form of Acceptance and the Offer Document.
3. LOAN NOTE ALTERNATIVE
The Offeror will be making available a Loan Note Alternative. Further details
are set out in Appendix III.
4. BACKGROUND TO AND REASONS FOR THE OFFER
Over the last year, Air Liquide and Air Products, acting independently, have
made a number of separate approaches to BOC, which led to the submission of
their respective final proposals in June 1999. The BOC board determined that
neither of these separate final proposals could be recommended over the other.
Since neither company could improve their separate proposals, each of Air
Liquide and Air Products independently concluded that a higher bid was possible
only if made jointly. In addition, they concluded that agreement on the ultimate
ownership of BOC's operations would assist in obtaining regulatory clearances in
areas where issues may exist.
The need for the industrial gases industry to provide the quality and breadth of
technology, products and added-value services that customers require in an
international environment is widely recognised. Air Liquide and Air Products
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see substantial opportunities for growth in the industrial gases industry for
those companies capable of anticipating and reacting to key trends, including:
o international customers requiring a consistently high quality supply of
products and services around the world
o customers increasing their focus on core activities and outsourcing
products and services outside these areas
o the need to provide innovative and comprehensive gas solutions to improve
customers' industrial performance
o environmental pressures driving higher usage of gases
o opportunities for growth in specific markets
Benefits to Air Liquide
- -----------------------
The combination of Air Liquide with BOC's complementary operations represents a
significant opportunity to apply Air Liquide's strategy for growth, based on
delivering added-value services and solutions, on a broader global stage.
Air Liquide's ownership of BOC operations will enhance its presence in three key
geographical regions:
o in Europe, Air Liquide will own BOC's UK and Irish gases operations
o in key US air separation gases markets, the addition of certain BOC
locations will strengthen Air Liquide's market position and enable it to
provide comprehensive national coverage
o in Asia, Air Liquide will have the opportunity to reinforce its presence,
notably in Japan and in certain high growth areas
In terms of markets and products, Air Liquide and BOC are also complementary:
o BOC's expertise in gases sectors such as specialty gases, helium and the
food industry and Air Liquide's focus on added-value services such as total
management of customers' gas requirements and energy solutions will be used
across the enlarged Air Liquide Group
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o Air Liquide will have an enlarged customer base in key high growth gases
sectors such as semiconductors, chemicals and metals
In addition to the enhanced growth prospects of the enlarged Air Liquide Group,
Air Liquide believes the combination creates an excellent opportunity to deliver
significant synergies and cost savings from integrating operations and
businesses in many geographical regions.
Air Liquide expects that the combination will enhance revenue growth. The
combination is also expected to be accretive to cash flow per share and earnings
per share before goodwill amortisation from the first full year following
completion of the Offer. It is expected that the impact on earnings per share
will be neutral post goodwill amortisation in the second full year following
completion of the Offer and accretive thereafter. The foregoing statements
should not be interpreted as a profit forecast nor to mean that Air Liquide's
future earnings per share will necessarily be greater than its historical
published earnings per share.
Benefits to Air Products
- ------------------------
The combination of Air Products' existing industrial gases operations and
selected BOC operations represents a unique opportunity for Air Products. It
will increase the company's focus on the world's high growth areas for
industrial gases and its size and scale to compete around the world.
Specifically, the combination will:
o enable Air Products to serve global customers on a broader geographical
base
o enhance Air Products' ability to serve key electronics and chemical
processing customers by moving into new geographical areas
o supplement Air Products' offerings to the metals, medical and foods
sectors around the world
o enhance Air Products' positions in the specialty gas and HyCO (hydrogen
and carbon monoxide) businesses and build Air Products' presence in the
CO2 market, particularly in North America
o build scale in Asia, a fast growing region for industrial gases
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o create a leading company in countries representing over 65 per cent of the
world's forecast gases growth over the next ten years
In addition to the enhanced growth prospects of the enlarged Air Products Group,
Air Products believes the combination creates an excellent opportunity to
deliver significant synergies and cost savings from integrating operations and
businesses in many geographical regions.
The directors of Air Products believe that the combination of Air Products'
existing industrial gases operations and selected BOC operations will enhance
Air Products' cash earnings per share (earnings plus amortisation, transaction
fees and costs per share) from the first full year following completion of the
Offer. It is also expected that the combination will be accretive to earnings
per share post goodwill amortisation at the end of year two. The foregoing
statement should not be interpreted as a profit forecast nor to mean that Air
Products' future earnings per share will necessarily be greater than its
historical published earnings per share.
5. AGREEMENT BETWEEN AIR LIQUIDE AND AIR PRODUCTS
Air Liquide and Air Products have entered into an agreement regarding the
formation of the Offeror and the conduct of the Offer. As part of this
agreement, which envisages that Air Liquide and Air Products will each
ultimately own approximately half of the gases operations of BOC, Air Liquide
and Air Products have agreed that as soon as practicable after completion of the
Offer and in a manner consistent with obtaining necessary regulatory approvals:
(a) all the gases operations of BOC in the United Kingdom and Ireland will
be owned by Air Liquide. Air Liquide currently has no operations in the
United Kingdom or Ireland of any substance;
(b) Air Liquide and Air Products will each own some of the operations of
BOC in the United States. This may require certain limited divestitures
to third parties;
(c) all operations of BOC in Australia and New Zealand, where Air Liquide
currently has substantial operations, will be owned by Air Products;
(d) it is expected that Air Liquide will own substantially all of the BOC
operations in Japan and Thailand while Air Products will own
significant operations elsewhere in Asia, including the BOC
participations in Singapore, Southern China and Malaysia;
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(e) all other gases operations of BOC (including those in South Africa),
not otherwise divested, will be owned by Air Liquide or Air Products
(or operated jointly in certain limited circumstances) on a country by
country or region by region basis; and
(f) Air Liquide and Air Products will review the strategic options for
BOC's distribution services and vacuum technology divisions.
By preserving, wherever practicable, the integrity of the local operations,
including those of the distribution services and vacuum technology divisions,
Air Liquide and Air Products wish to maintain employee morale and to preserve
customer continuity.
6. REGULATORY MATTERS
Air Liquide and Air Products are committed to working together with BOC to
obtain necessary regulatory approvals. Air Liquide's and Air Products' joint
offer has been structured to address regulatory issues and they are confident
that this structure will enable the necessary regulatory approvals to be
obtained within six months.
Air Liquide and Air Products have given certain assurances to the board of BOC
in relation to their approach to obtaining necessary regulatory approvals,
including an assurance that they will use all reasonable endeavours to satisfy
the Pre-Conditions as soon as practicable. In certain circumstances where a
Pre-Condition or a regulatory Condition is invoked or becomes incapable of
satisfaction so that the Offer is not made or lapses, Air Liquide and Air
Products have agreed to pay BOC a fee of USD100 million in aggregate.
7. INFORMATION ON AIR LIQUIDE
Air Liquide is the world's largest industrial gases company. Air Liquide
operates in 60 countries through 125 subsidiaries and employs over 28,000
people. It combines the resources and expertise of a global group with a strong
local presence. Focused on its core industrial gases business, it serves over
one million customers world-wide. First listed in 1913, Air Liquide is one of
the leading stocks on the Paris stock exchange in terms of size, history and
number of individual shareholders.
In the year ended 31 December, 1998, Air Liquide's revenue was derived as
follows: 25 per cent. in France, 30 per cent. in the rest of Europe, 29 per
cent. in the Americas, 14 per cent. in Asia-Pacific and 2 per cent. in Africa.
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Gases and services for industry and healthcare, Air Liquide's main business,
represented approximately 80 per cent. of group sales and approximately 90 per
cent. of operating income during the year to 31 December, 1998. In gases and
services for industry, which represented 67 per cent. of group sales during the
same period, Air Liquide aims to meet requirements ranging from those of small
businesses to large industrial companies. Air Liquide supplies major industrial
sectors such as steel, iron, chemicals, oil refining, glass, energy, electronics
and paper pulp. Gases and services for healthcare represented 11 per cent. of
total group sales during the year to 31 December, 1998. Air Liquide serves both
hospitals and patients at home.
Air Liquide also offers a wide range of welding products and services. This
activity represented 11 per cent. of group sales during the year to 31 December,
1998 and ranges from the supply of consumable products to sophisticated welding
equipment, including the full range of associated services, such as maintenance
and training. Finally, Air Liquide has a range of other businesses which
accounted for 11 per cent. of Air Liquide's consolidated sales during the year
to 31 December, 1998.
In the year to 31 December, 1998, Air Liquide reported sales of
FFr39,932 million (GBP3,995 million), profit before tax and exceptional items
of FFr5,425 million (GBP543 million) and earnings per share before exceptional
items of FFr41.04 (GBP4.11). Stockholders' equity at 31 December, 1998 was
FFr30,461 million (GBP3,047 million).
8. INFORMATION ON AIR PRODUCTS
Air Products is the fourth largest industrial gases company in the world with
reported gas sales of USD2,908 million (GBP1,873 million) in the financial year
to 30 September, 1998. This represents approximately two-thirds of Air Products'
sales, with the remainder accounted for by complementary businesses in equipment
and services and specialty chemicals.
Air Products' industrial gases business serves a wide range of industries
including electronics, chemical processing, refining, food and metals. Air
Products' industrial gases sales are focused primarily in North America and
Europe: 58 per cent. were in the US and Canada and 37 per cent. were in Europe,
with positions established in Asia to support key customer sectors, including a
number of joint ventures with local partners. Air Products operates in over 30
countries and employs approximately 17,000 people.
Air Products also has a successful specialty chemicals business focusing on
performance chemicals, intermediate chemicals and polymer chemicals. The
division supplies a wide variety of customer sectors including adhesives and
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sealants, furniture, paints and coatings, construction, agriculture, textiles
and appliances. Total sales for the division in the financial year to 30
September, 1998 were USD1,539 million (GBP991 million). The remainder of Air
Products' sales in the period was made up from sales of gas related equipment
and services of USD472 million (GBP304 million).
For the financial year ended 30 September, 1998, Air Products' results comprised
consolidated net income before special items of USD489 million (GBP315 million)
on sales of USD4,919 million (GBP3,168 million). In its interim results for the
six months ended 31 March, 1999, Air Products reported consolidated net income
before special items of USD231 million (GBP149 million) on sales of USD2,528
million (GBP1,628 million). As at 31 March, 1999, the Air Products Group had
total shareholders' equity of USD2,776 million (GBP1,788 million).
9. INFORMATION ON THE OFFEROR
The Offeror will be a company incorporated in the UK specifically for the
purpose of making the Offer. Air Liquide and Air Products will each own 50 per
cent. of the shares of the Offeror and will each nominate half of the board of
directors.
10. INFORMATION ON BOC
BOC is the third largest industrial gases company in the world with GBP2,697
million of industrial gases and related products sales in the financial year to
30 September, 1998, accounting for 81 per cent. of its total sales of continuing
operations. The remaining 19 per cent. of such sales was accounted for by its
vacuum technology and distribution services divisions.
BOC's industrial gases and related products sales in the financial year to
30 September, 1998 were 31 per cent. in the Americas, 25 per cent. in Europe,
32 per cent. in Asia-Pacific and 12 per cent. in Africa.
For the financial year ended 30 September, 1998, BOC reported earnings before
exceptional items of GBP259 million on net sales of GBP3,295 million. In its
interim results for the six months ended 31 March, 1999, BOC reported earnings
before exceptional items of GBP116 million on net sales of GBP1,416 million. As
at 31 March, 1999, the BOC Group had shareholders' capital and reserves of
GBP1,992 million.
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11. MANAGEMENT AND EMPLOYEES
Air Liquide and Air Products attach great importance to the skills and
experience of the existing management and employees of BOC and will work
together with BOC to develop a clear strategy for their future. The existing
employment rights, including pension rights, of all existing and past management
and employees of BOC will be fully safeguarded in accordance with all applicable
law.
Air Liquide and Air Products have given certain assurances to BOC concerning the
continuation of employee benefits.
12. BOC SHARE OPTION SCHEMES
Appropriate proposals, including cash cancellation proposals, will be made to
holders of options granted under the BOC Share Option Schemes subject to the
Offer becoming or being declared unconditional in all respects.
13. FINANCING
Air Liquide and Air Products have obtained committed funds to finance the Offer
by means of credit agreements with, amongst others, Banque Nationale de Paris
and Credit Agricole Indosuez (in the case of Air Liquide) and The Chase
Manhattan Bank (in the case of Air Products). Further details of the financing
arrangements are contained in Appendix IV.
14. COMPULSORY ACQUISITION AND APPLICATION FOR DE-LISTING OF BOC SECURITIES
It is the intention of Air Liquide and Air Products, if sufficient acceptances
of the Offer are received and/or sufficient BOC Shares are otherwise acquired,
to apply the provisions of section 428 to 430F (inclusive) of the Companies Act
to acquire compulsorily any outstanding BOC Shares (including BOC Shares
represented by BOC ADSs).
It is also intended that, following the Offer becoming or being declared
unconditional in all respects, and subject to applicable requirements of the
London and New York stock exchanges, the Offeror will procure that BOC will
apply to those exchanges for the BOC Securities to be de-listed. De-listing
would significantly reduce the liquidity and marketability of any BOC Securities
not assented to the Offer. It is anticipated that the cancellation of BOC's
listing on the London Stock Exchange will take effect no earlier than
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20 business days after the Offer becomes or is declared unconditional in all
respects.
15. GENERAL
Air Liquide and Air Products are committed to making the Offer by posting the
Offer Document and related Forms of Acceptance as soon as practicable after the
regulatory clearances referred to in Appendix I are received.
The Offer will be subject to the applicable requirements of the London Stock
Exchange and the City Code. This announcement does not constitute an extension
of the Offer into the United States. However, it is intended to extend the
Offer, if and when made, into the United States in compliance with the
procedural and filing requirements of the Exchange Act and the rules of the SEC
thereunder except to the extent that exemptive relief therefrom is granted by
the SEC. As a result, the Offer, if extended into the United States, will also
be subject to the US federal securities laws.
The availability of the Offer to persons outside the United Kingdom may be
affected by the laws of the relevant jurisdiction. Such persons should inform
themselves about, and observe, any applicable requirements of the relevant
jurisdiction.
Unless the Offeror otherwise determines, the Offer will not be made, directly or
indirectly, in or into, or by the use of the mails of, or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce of, or any facilities of a
national, state or other securities exchange of, Australia, Japan or Canada and
will not be capable of acceptance by any such use, means, instrumentality or
facility within, Australia, Japan or Canada. Accordingly, copies of this
announcement are not being, and must not be, mailed, or otherwise forwarded,
distributed or sent in, into or from Australia, Japan or Canada and persons
receiving this announcement (including custodians, nominees and trustees) must
not distribute or send it in, into or from Australia, Japan or Canada.
This announcement does not constitute an offer or an invitation to purchase any
securities.
Subject to the following paragraph, none of Air Liquide, any director of Air
Liquide nor, so far as Air Liquide is aware, any party acting in concert with
Air Liquide, owns, controls, has options to acquire, or holds derivatives
referenced to, any BOC Shares. In the interests of confidentiality, Air Liquide
has not made any enquiries in this respect of certain parties who may be deemed
by the Panel to be acting in concert with it for the purposes of the Offer.
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Except for 80 BOC Shares owned by Air Products and 210 ADRs owned by L. Paul
Bremer III, a director of Air Products, none of Air Products, any director of
Air Products nor, so far as Air Products is aware, any party acting in concert
with Air Products, owns, controls, has options to acquire, or holds derivatives
referenced to, any BOC Shares. In the interests of confidentiality, Air Products
has not made any enquiries in this respect of certain parties who may be deemed
by the Panel to be acting in concert with it for the purposes of the Offer.
16. RECOMMENDATION
The directors of BOC, who have been so advised by J.P. Morgan, their financial
advisers, consider the terms of the Offer to be fair and reasonable. In
providing advice to the board, J.P. Morgan has taken into account the directors'
commercial assessments. Accordingly, the directors of BOC unanimously intend to
recommend that BOC shareholders accept the Offer, as they intend to do in
respect of their own respective beneficial shareholdings.
ENQUIRIES:
AIR LIQUIDE AIR PRODUCTS BOC
Tel: 13 July, +44 171 831 3113 Tel: 13 July, +44 171 404 5959 Tel: +44 1276 477 222
Thereafter, +33 1 40 62 55 55 Thereafter, +1 610 481 4911 Sir David John
Alain Joly Hap Wagner Tony Isaac
Jean-Claude Buono Mike Hilton Chris Marsay
Remi Charachon Richard Smith
Olivier Fidel
LAZARD - LONDON MORGAN STANLEY J.P. MORGAN
Tel: +44 171 588 2721 Tel: +44 171 513 5000 Tel: +44 171 600 2300
Marcus Agius Simon Robey Nick Draper
Julian Goodwin Andrew Bell Hamilton Shields
Paul Kelly Daniel Bailey Patrick Magee
LAZARD - PARIS GOLDMAN SACHS
Tel: +33 1 44 13 01 11 Tel: +44 171 774 1000
David Dautresme Richard Sapp
Erik Maris Richard Campbell-Breeden
Tel: +1 212 902 1000
John Vaske
FINANCIAL DYNAMICS BRUNSWICK THE MAITLAND
Tel: +44 171 831 3113 Tel: +44 171 404 5959 CONSULTANCY
Charles Watson Susan Gilchrist Tel: +44 171 379 5151
David Yates Ben Brewerton Angus Maitland
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PUBLICIS
Tel: +33 1 44 43 71 00
Jean-Yves Naouri
Seth Goldschlager
Lazard Brothers, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for Air Liquide in connection with the Offer and
for no one else and will not be responsible to anyone other than Air Liquide for
providing the protections afforded to customers of Lazard Brothers or for
providing advice in relation to the Offer.
Morgan Stanley and Goldman Sachs, which are regulated in the UK by The
Securities and Futures Authority Limited, are acting for Air Products in
connection with the Offer and for no one else and will not be responsible to
anyone other than Air Products for providing the protections afforded to
customers of Morgan Stanley and Goldman Sachs or for providing advice in
relation to the Offer.
J.P. Morgan, which is regulated in the UK by The Securities and Futures
Authority Limited, is acting for BOC in connection with the Offer and for no one
else and will not be responsible to anyone other than BOC for providing the
protections afforded to customers of J.P. Morgan or for providing advice in
relation to the Offer.
Unless the Offeror otherwise determines, the Offer will not be made, directly or
indirectly, in or into Australia, Japan or Canada. Accordingly, copies of this
announcement are not being, and must not be, mailed or otherwise distributed or
sent in, into or from Australia, Japan or Canada.
If the Offer is extended into the United States, the Loan Note Alternative will
not be made available in the United States.
Certain statements in these materials are 'forward looking statements' within
the meaning of the United States Private Securities Litigation Reform Act of
1995. All forward looking statements involve risks and uncertainties and are
based on current expectations regarding important risk factors. Statements
contained herein regarding the consummation and benefits of the proposed
transaction, as well as expectations with respect to future sales, earnings or
cash flows, ability to sustain margins, value obtained related to the
divestiture of assets or businesses, and realisation of financial and operating
synergies and efficiencies, are subject to known and unknown risks,
uncertainties, and contingencies, many of which are beyond the control of Air
Liquide and Air Products, which may cause actual results, performance, or
achievements to differ materially from anticipated results,
17
performance, or achievements. Factors that might cause forward looking
statements to differ materially from actual results include, among other
things, requirements imposed by regulatory authorities to permit the
transaction to be consummated, unanticipated tax and other costs in
separating the ownership of BOC's businesses and assets, ability to
amortise goodwill over 40 years, overall economic and business conditions,
demand for the goods and services of Air Liquide, Air Products, BOC or
their respective affiliates, competitive factors in the industries in which
each of them competes, changes in government regulation, downsizing, or
termination, the timing, impact, and other uncertainties of future
acquisitions or combinations within relevant industries, fluctuations in
interest rates and foreign currencies and the price at which Air Liquide
and Air Products would issue additional equity, as well as the impact of
tax and other legislation and other regulations in the jurisdictions in
which Air Liquide, Air Products, BOC and their respective affiliates
operate.
18
APPENDIX I
PRE-CONDITIONS OF THE OFFER
The making of the Offer, by the posting of the Offer Document and related Forms
of Acceptance, will take place once the following Pre-Conditions are satisfied
or waived:
(a) (i) to the extent that the Offer or any matters arising therefrom falls
within the scope of the Council Regulation (EEC) 4064/89 (the 'Merger
Regulation'), the European Commission having issued a decision under
Article 6(1)(b) of the Merger Regulation (or being deemed to have done
so under Article 10(6) of the Merger Regulation) declaring the Offer
and any matters arising therefrom compatible with the common market
without requiring any amendments, assurances, conditions or
undertakings of Air Liquide and Air Products or either of them that
are not reasonably satisfactory to both Air Liquide and Air Products
and, in the event that a request under Article 9(2) of the Merger
Regulation has been made by a Member State, the European Commission not
having decided to refer any aspect of the Offer or any matter arising
therefrom to a competent authority of a Member State in accordance with
Article 9(1) of the Merger Regulation; or
(ii)(aa) if the European Commission issues a decision under
Article 6(1)(c) of the Merger Regulation to open a Phase II
investigation, the European Commission subsequently having issued
a decision under Article 8(2) of the Merger Regulation (or being
deemed to have done so under Article 10(6) of the Merger
Regulation) declaring the Offer and any matters arising therefrom
compatible with the common market without requiring any
amendments, assurances, conditions or undertakings of Air Liquide
and Air Products or either of them that are not reasonably
satisfactory to both Air Liquide and Air Products; and/or
(bb) if the European Commission makes a reference under Article 9(1)
of the Merger Regulation to a competent authority of a Member
State (including a deemed decision to make a reference under
Article 9(5)), receipt in a form reasonably satisfactory to both
Air Liquide and Air Products of confirmation from such competent
authority that the Offer and any matters arising therefrom may
proceed without requiring any amendments, assurances, conditions
or undertakings of Air Liquide and Air Products or either of
19
them that are not reasonably satisfactory to both Air Liquide and
Air Products; and
(b) to the extent that the Offer or any matters arising therefrom is/are a
qualifying merger under the Fair Trading Act 1973, the Office of Fair
Trading having indicated in terms reasonably satisfactory to both Air
Liquide and Air Products that it is not the intention of the Secretary
of State for Trade and Industry to refer the Offer or any matter
arising therefrom to the Competition Commission, or the statutory
period for any such referral expiring without such reference or such
referral having been made and the Secretary of State for Trade and
Industry having announced that the Offer and any matters arising
therefrom can proceed on terms reasonably satisfactory to both Air
Liquide and Air Products; and
(c) all necessary filings having been made, all applicable waiting and
other time periods (including extensions thereof) having expired,
lapsed or been terminated and all statutory and regulatory obligations
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as
amended) of the United States and the regulations made thereunder,
having been complied with in connection with the Offer and any matters
arising therefrom; and
(d) (i) the Commissioner of Competition (the 'Commissioner') appointed under
the Competition Act (Canada) issuing an advance ruling certificate
pursuant to section 102 of the Competition Act (Canada) to the
effect that he is satisfied that he would not have sufficient grounds
on which to apply to the Competition Tribunal of Canada for an order
under section 92 of the Competition Act (Canada) with respect to the
Offer or any matter arising therefrom or (ii) the applicable waiting
period under section 123 of the Competition Act (Canada) expiring and
Air Liquide and Air Products being advised in writing by the Commissioner
that the Commissioner has determined not to make an application for an
order under section 92 of the Competition Act (Canada) in respect of the
Offer or any matter arising therefrom and any terms or conditions
attached to any such advice being reasonably satisfactory to both
Air Liquide and Air Products.
Air Liquide and Air Products reserve the right to waive in whole or in part all
or any of the Pre-Conditions.
Unless Air Liquide, Air Products and the Panel otherwise agree, in the event
that any of the Pre-Conditions have not been satisfied or waived by close of
business (London time) on 13 March, 2000, the Offer will not be made.
20
APPENDIX II
CONDITIONS AND FURTHER TERMS OF THE OFFER
The Offer, which will be made by Lazard Brothers, Morgan Stanley and Goldman
Sachs on behalf of the Offeror, will comply with the applicable rules and
regulations of the London Stock Exchange and the City Code. The Offer will be
governed by English law and will be subject to the jurisdiction of the courts of
England and to the terms and conditions set out in the Offer Document and
related Forms of Acceptance. This announcement does not constitute an extension
of the Offer into the United States. However, it is intended to extend the
Offer, if and when made, into the United States in compliance with the
procedural and filing requirements of the Exchange Act and the rules of the SEC
thereunder except to the extent that exemptive relief therefrom has been granted
by the SEC. As a result, the Offer, if extended into the United States, will
also be subject to the US federal securities laws.
1. CONDITIONS OF THE OFFER
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3:00pm (London time) on the first closing date of the Offer
(or such later time(s) and/or date(s) as the Offeror may, with the consent
of the Panel or in accordance with the City Code, decide) in respect of not
less than 90 per cent. (or such lesser percentage as the Offeror may
decide) in nominal value of the BOC Shares to which the Offer relates,
provided that this Condition 1(a) will not be satisfied unless the Offeror
and/or any of its subsidiaries shall have acquired or agreed
(unconditionally or subject only to conditions which will be fulfilled upon
the Offer becoming or being declared unconditional in all respects) to
acquire (pursuant to the Offer or otherwise) BOC Shares carrying in
aggregate more than 50 per cent. of the voting rights then exercisable at a
general meeting of BOC. For the purposes of this Condition 1(a): (i) BOC
Shares which have been unconditionally allotted shall be deemed to carry
the voting rights they will carry upon being entered in the register of
members of BOC; (ii) the expression 'BOC Shares to which the Offer relates'
shall be construed in accordance with sections 428 to 430F of the Companies
Act; and (iii) valid acceptances shall be treated as having been received
in respect of any BOC Shares which the Offeror shall, pursuant to section
429(8) of the Companies Act, be treated as having acquired or contracted to
acquire by virtue of acceptances of the Offer;
21
(b) in the event that Pre-Condition (a) to the Offer is waived,
(i) to the extent that the Offer or any matter arising therefrom
falls within the scope of the Merger Regulation, the European
Commission having issued a decision under Article 6(1)(b) or
Article 8(2) of the Merger Regulation (or being deemed to have done
so under Article 10(6) of the Merger Regulation) declaring the
Offer and any matter arising therefrom compatible with the common
market without requiring any amendments, assurances, conditions or
undertakings of Air Liquide and Air Products or either of them that
are not reasonably satisfactory to both Air Liquide and Air Products
and, in the event that a request under Article 9(2) of the Merger
Regulation has been made by a Member State, the European Commission
not having decided to refer any aspect of the Offer or any matters
arising therefrom to a competent authority of a Member State in
accordance with Article 9(1) of the Merger Regulation; or
(ii) (aa) if the European Commission issues a decision under
Article 6(1)(c) of the Merger Regulation to open a
Phase II investigation, the European Commission
subsequently having issued a decision under Article 8(2)
of the Merger Regulation (or being deemed to have done
so under Article 10(6) of the Merger Regulation) declaring
the Offer and any matters arising therefrom compatible
with the common market without requiring any amendments,
assurances, conditions or undertakings of Air Liquide and
Air Products or either of them that are not reasonably
satisfactory to both Air Liquide and Air Products;
and/or
(bb) if the European Commission makes a reference under
Article 9(1) of the Merger Regulation to a competent
authority of a Member State (including a deemed decision
to make a reference under Article 9(5)), receipt in a
form reasonably satisfactory to both Air Liquide and
Air Products of confirmation from such competent authority
that the Offer and any matters arising therefrom may proceed
without requiring any amendments, assurances, conditions or
undertakings of Air Liquide and Air Products or either
of them that are not reasonably satisfactory to both
Air Liquide and Air Products;
22
(c) in the event that Pre-Condition (b) to the Offer is waived, to the
extent that the Offer or any matters arising therefrom is/are a
qualifying merger under the Fair Trading Act 1973, the Office of Fair
Trading having indicated in terms satisfactory to both Air Liquide and
Air Products that it is not the intention of the Secretary of State for
Trade and Industry to refer the Offer or any matter arising therefrom to
the Competition Commission, or the statutory period for any such
referral expiring without such reference or such referral having been
made and the Secretary of State for Trade and Industry having announced
that the Offer and any matters arising therefrom can proceed on terms
reasonably satisfactory to both Air Liquide and Air Products;
(d) in the event that Pre-Condition (c) to the Offer is waived, all
necessary filings having been made, all applicable waiting and other
time periods (including extensions thereof) having expired, lapsed or
been terminated and all statutory and regulatory obligations under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) of the
United States and the regulations made thereunder, having been complied
with in connection with the Offer and any matters arising therefrom;
(e) in the event that Pre-Condition (d) to the Offer is waived, (i) the
Commissioner appointed under the Competition Act (Canada) issuing an
advance ruling certificate pursuant to section 102 of the Competition Act
(Canada) to the effect that he is satisfied that he would not have
sufficient grounds on which to apply to the Competition Tribunal of Canada
for an order under section 92 of the Competition Act (Canada) with respect
to the Offer or any matter arising therefrom or (ii) the applicable waiting
period under section 123 of the Competition Act (Canada) expiring and Air
Liquide and Air Products being advised in writing by the Commissioner that
the Commissioner has determined not to make an application for an order
under section 92 of the Competition Act (Canada) in respect of the Offer or
any matter arising therefrom and any terms or conditions attached to any
such advice being reasonably satisfactory to both Air Liquide and Air
Products;
(f) the Offer having been approved or deemed to be approved or exempted
pursuant to the Investment Canada Act;
(g) in respect of the Offer or any matter arising therefrom, (i) the
Treasurer of Australia under the Foreign Acquisitions and Takeovers Act
1976 as amended, (ii) the Australian Competition and Consumer Commission
under the Trade Practices Act 1972 as amended, (iii) the Minister of
Finance/Overseas Investment Commission under the New Zealand
23
Overseas Investment Regulations 1995 and (iv) the Commerce Commission
under the New Zealand Commerce Act 1986 having each issued any approval,
consent, authorisation or notification of non-objection as may be required
in terms reasonably satisfactory to both Air Liquide and Air Products;
(h) to the extent material in the context of the Offer, all necessary
notifications and filings having been made, all necessary waiting and other
time periods (including extensions thereof) under any applicable
legislation or regulation of any relevant jurisdiction having expired,
lapsed or been terminated and all statutory or regulatory obligations in
any relevant jurisdiction having been complied with, in each case in
connection with the Offer or proposed acquisition of any shares or other
securities (or the equivalent) in BOC, or control (directly or indirectly)
of any member of the Wider BOC Group by the Offeror and all authorisations,
orders, grants, recognitions, confirmations, consents, clearances,
certificates, permissions or approvals ('Authorisations') necessary or
reasonably required in any jurisdiction for or in respect of the Offer and
the acquisition or the proposed acquisition of any shares or other
securities in BOC or control (directly or indirectly) of any member of the
Wider BOC Group by the Offeror having been obtained in terms and in a form
reasonably satisfactory to both Air Liquide and Air Products from all
relevant Third Parties and all such Authorisations necessary or reasonably
required to carry on the business of any member of the Wider BOC Group in
any jurisdiction having been obtained in a form reasonably satisfactory to
both Air Liquide and Air Products from all appropriate Third Parties (as
defined in Condition 1(i)) and from any persons, or bodies with whom any
member of the Wider BOC Group has entered into contractual arrangements and
all such Authorisations remaining in full force and effect at the time at
which the Offer becomes otherwise unconditional in all respects and there
being no notice or firm indication of an intention to revoke, suspend,
restrict, modify or not to renew such Authorisations;
(i) no government, government department or governmental, quasi-governmental,
supranational, statutory, regulatory, administrative or investigative body,
authority (excluding any anti-trust, competition or merger control
authorities or similar authorities), trade agency, court, professional
association, institution, environmental body or any other similar body or
person in any jurisdiction (each a 'Third Party') having notified a
decision to take, institute, implement or threaten any action, proceeding,
suit, investigation, enquiry or reference, or having required any action to
be taken or having enacted or made any statute, regulation,
24
decision or order or taken any measures or other steps and there not
continuing to be outstanding any statute, regulation, decision or order
which would or could reasonably be expected to:
(i) make the Offer or the acquisition by the Offeror of any or all
BOC Shares or other securities (or the equivalent) in or
control of BOC void, unenforceable, illegal or prohibited in
or under the laws of any relevant jurisdiction or otherwise to
a material extent restrict, prohibit, delay or otherwise
interfere with the implementation of, or impose material
additional conditions or obligations with respect to, or
require material amendment of, the Offer or the acquisition by
the Offeror of any or all BOC Shares or control of BOC;
(ii) require the divestiture by any member of the Wider Air
Products Group, the Wider Air Liquide Group or the Wider BOC
Group of all or any material part of their respective
businesses, assets or properties or impose any material
limitation on their ability to conduct their respective
businesses or to own any of their respective assets or
properties;
(iii) impose any material limitation on, or result in a material
delay in, the ability of the Offeror to acquire or hold or to
exercise effectively, directly or indirectly, all or any
rights of ownership of shares or other securities (or the
equivalent) in BOC or on the ability of the Offeror (directly
or indirectly) to hold or exercise effectively any rights of
ownership of shares or other securities in or to exercise
management control over any member of the Wider BOC Group;
(iv) require any member of the Wider Air Products Group, the Wider
Air Liquide Group or the Wider BOC Group to acquire or offer
to acquire any shares or other securities (or the equivalent)
in any member of the Wider BOC Group owned by any third party
or to sell or offer to sell any shares or other securities (or
the equivalent in, or any asset of any member of the Wider BOC
Group (in each case other than in the implementation of the
Offer or any matter arising therefrom));
(v) require a divestiture by any member of the Wider Air Products
Group or the Wider Air Liquide Group of any shares or other
securities (or the equivalent) in BOC as a consequence of the
Offer;
(vi) otherwise affect the assets or profits of the Wider BOC Group
in a manner which is adverse to and material in the context of
the Wider BOC Group taken as a whole;
25
and all applicable waiting and other time periods during which any such
Third Party could decide to take, institute or threaten any such action,
proceeding, suit, investigation, enquiry or reference or otherwise
intervene under the laws or regulations of any jurisdiction in respect
of the Offer having expired, lapsed or been terminated;
(j) (save as a consequence of any divestitures by Air Liquide or Air
Products (whether to a third party or each other) of any business,
assets, properties or members of the Wider BOC Group) there being no
provision of any arrangement, agreement, licence, permit, lease or other
instrument to which any member of the Wider BOC Group is a party or by
or to which any such member or any of their respective assets is or may
be bound or be subject which, as a consequence of the Offer or any
matter arising directly therefrom or because of a change in the control
or management of any member of the Wider BOC Group would or might
reasonably be expected to result in, to an extent which is material in
the context of the Wider BOC Group taken as a whole:
(i) any monies borrowed by, or any other indebtedness or grant
available to or received by, any member of the Wider BOC Group
being or becoming repayable, or capable of being declared
repayable, immediately or prior to its or their stated
maturity;
(ii) the rights, liabilities, obligations, interests or business of
any member of the Wider BOC Group under any such arrangement,
agreement, licence, permit, lease or instrument or the
interests or business of any member of the Wider BOC Group in
or with any other firm or company or body or person (or any
agreement or arrangements relating to any such business or
interests) being, or becoming capable of being, terminated or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken
thereunder;
(iii) any assets or interests of any member of the Wider BOC Group
being or falling to be disposed of or charged or any right
arising under which any such asset or interest could be
required to be disposed of or charged or ceasing to be
available to any member of the Wider BOC Group;
(iv) the creation or enforcement of any mortgage, charge or other
security interest over the whole or any part of the business,
property or assets of any member of the Wider BOC Group or any
such security interest becoming enforceable or being enforced;
26
(v) the financial or trading position of any member of the Wider
BOC Group being prejudiced or adversely affected; or
(vi) the creation of any liability (actual or contingent) by any
member of the Wider BOC Group;
(k) no member of the Wider BOC Group having since 30 September 1998:
(i) issued or agreed to issue or authorised or proposed the issue
of additional shares or securities of any class, or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares,
securities or convertible securities (save as between BOC and
wholly-owned subsidiaries of BOC in the ordinary course and
save for the issue of BOC Securities on the exercise of
options granted before the date of this announcement) except
(in the case of members of the Wider BOC Group other than BOC)
to the extent the same is not material in the context of the
Offer;
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution
other than to BOC or one of its wholly-owned subsidiaries
excluding any bonus, dividend or distribution recommended,
declared, paid or made or proposed to be recommended,
declared, paid or made by a member of the Wider BOC Group
other than BOC which is not material in the context of the
Wider BOC Group taken as a whole or any dividend or
distribution to be recommended, declared, paid or made by BOC
which is specifically referred to in this press announcement;
(iii) merged with or demerged or acquired any body corporate,
partnership or business or, other than in the ordinary course
of business and on arms' length terms, acquired or disposed
of, transferred, mortgaged or charged or created any security
interest over, any assets or any right, title or interest in
any asset (including shares and trade investments) in each
case to an extent which is material in the context of the
Wider BOC Group taken as a whole;
(iv) made, committed to make, authorised, proposed or announced an
intention to propose any change in its share or loan capital
except (in the case of members of the Wider BOC Group other
than BOC) to the extent the same is not material in the
context of the Offer;
27
(v) issued, authorised or proposed the issue or authorisation of
any debentures or (save as between BOC and its wholly-owned
subsidiaries or in the ordinary course of business) incurred
or increased any indebtedness or contingent liability to an
extent which is material in the context of the Wider BOC Group
taken as a whole;
(vi) entered into or varied any contract, transaction, arrangement
or commitment (whether in respect of capital expenditure or
otherwise) which is long term (other than in the ordinary
course of business) or of an unusual nature or magnitude, or
which involves an obligation of a nature or magnitude which
is, in any such case, material in the context of the Wider BOC
Group taken as a whole or which is materially and adversely
restrictive on the business of the Wider BOC Group;
(vii) entered into or varied or made any offer to enter into or vary
the terms of any agreement, contract, commitment or
arrangement with any director of BOC;
(viii) implemented, effected or authorised, or proposed or announced
its intention to implement, effect, authorise or propose any
reconstruction, amalgamation, commitment, scheme or other
transaction or arrangement except (in the case of members of
the Wider BOC Group other than BOC) to an extent which is not
material in the context of the Wider BOC Group taken as a
whole;
(ix) purchased, redeemed or repaid or proposed the purchase,
redemption or repayment of any of its own shares or other
securities (or the equivalent) or reduced or made any other
change to any part of its share capital except (in the case of
members of the Wider BOC Group other than BOC) to an extent
which is not material in the context of the Wider BOC Group
taken as a whole;
(x) waived, compromised or settled any claim in a manner which is
material and adverse in the context of the Wider BOC Group
taken as a whole;
(xi) (in the case of BOC only) made any material alteration to
its memorandum or articles of association;
(xii) taken or proposed any corporate action or had any legal proceedings
instituted or threatened against it for its winding-up
28
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of any administrator, administrative receiver, trustee
or similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or appointed any analogous
person in any jurisdiction except (in the case of members of the
Wider BOC Group other than BOC) to an extent which is not material
in the context of the Wider BOC Group taken as a whole;
(xiii) been unable, or admitted in writing that it is unable, to pay
its debts or having stopped or suspended (or threatened to
stop or suspend) payment of its debts generally or ceased or
threatened to cease carrying on all or a substantial part of
its business except (in the case of members of the Wider BOC
Group other than BOC) to an extent which is not material in
the context of the Wider BOC Group taken as a whole; or
(xiv) entered into any contract, commitment, agreement or
arrangement or passed any resolution with respect to any of
the transactions, matters or events referred to in this
paragraph;
(l) since 30 September 1998:
(i) there having been no material adverse change in the assets,
financial or trading position or profits of the Wider BOC
Group taken as a whole other than as a consequence of the
Offer or the arrangements between Air Liquide and Air Products
relating to the ultimate ownership of the assets of BOC;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced or instituted by or
against or remaining outstanding against any member of the Wider
BOC Group or to which any member of the Wider BOC Group is or may
become a party (whether as plaintiff or defendant or otherwise) and
no enquiry or investigation by or complaint or reference to any
Third Party against or in respect of any member of the Wider
BOC Group having been threatened, announced or instituted or
remaining outstanding, against or in respect of any member of the
Wider BOC Group which, in any such case, is likely adversely to
affect such member of the Wider BOC Group to an extent which is
material in the context of the Wider BOC Group taken as a whole; and
29
(iii) other than as a consequence of the Offer or the arrangements
between Air Liquide and Air Products relating to the ultimate
ownership of the assets of BOC, no contingent or other
liability having arisen which could reasonably be expected
adversely to affect the assets, financial or trading position
or profits of BOC to an extent which is material in the
context of the Wider BOC Group taken as a whole;
(m) neither Air Liquide nor Air Products having discovered:
(i) that any financial, business or other information concerning
BOC or the Wider BOC Group publicly disclosed or disclosed to
Air Liquide and Air Products at any time in 1999 by or on
behalf of BOC is misleading, contains a misrepresentation of
fact or omits to state a fact necessary to make the
information contained therein not misleading in each case to
an extent which is material in the context of the Wider BOC
Group taken as a whole;
(ii) that any member of the Wider BOC Group or any partnership,
company or other entity in which any member of the Wider BOC
Group has a significant economic interest and which is not a
subsidiary undertaking of BOC is subject to any liability,
contingent or otherwise, which is not disclosed in the Annual
Report and Accounts of BOC or the interim results of BOC for
the 6 months ended 31 March, 1999, and which is material in
the context of the Wider BOC Group taken as a whole; or
(iii) any information which renders untrue or misleading in the
context of the Offer any information disclosed to Air Liquide
and Air Products by or on behalf of BOC in each case to an
extent which is material in the context of the Wider BOC Group
taken as a whole; and
(n) neither Air Liquide nor Air Products having discovered:
(i) that any past or present member of the Wider BOC Group has not
complied with all applicable legislation or regulations of any
jurisdiction with regard to the disposal, discharge, spillage,
leak or emission of any waste or hazardous substance or any
substance which would impair the environment or harm human
health, or otherwise relating to environmental matters, which
non-compliance could reasonably be expected to give rise to
any material liability (whether actual or contingent) on the
part of any member of the Wider BOC Group in each case to an
extent which
30
is material in the context of the Wider BOC Group taken as a
whole; or
(ii) that:
(a) there has been a disposal, spillage or leak of waste or
hazardous substance or any substance which would impair
the environment or harm human health on; or
(b) there has been an emission or discharge of any waste or
hazardous substance or any substance which would impair
the environment or harm human health from,
any land or other asset now or previously owned, occupied or
made use of by any past or present member of the Wider BOC
Group which could reasonably be expected to give rise to any
material liability (whether actual or contingent) on the part
of any member of the Wider BOC Group to an extent which is
material in the context of the Wider BOC Group in each case
taken as a whole;
(iii) that there is any material liability (whether actual or
contingent) or requirement to improve or install new plant or
equipment or make good, repair, re-instate or clean up any
property now or previously owned, occupied or made use of by
any past or present member of the Wider BOC Group or in which
any such member may have or previously have had or be deemed
to have or have had an interest under any environmental
legislation, regulation, notice, circular or order of any
Third Party in each case which is material in the context of
the Wider BOC Group taken as a whole;
(iv) that a person, persons or class or classes of person could
reasonably be expected to have any claim or claims in respect
of any product or process of manufacture or materials used
therein now or previously manufactured, sold or carried out by
any past or present member of the Wider BOC Group which claim
or claims would materially and adversely affect the Wider BOC
Group taken as a whole.
The Offeror shall not invoke any of the Conditions (b) to (n) (inclusive) in
relation to any circumstances which would otherwise give rise to a right to
invoke such Condition where there has been fair disclosure of such circumstances
to Air Liquide and Air Products pursuant to a due diligence presentation and
questions arising therefrom given by BOC to Air Liquide and Air Products on
10 July, 1999 and, in relation to employment and pensions
31
matters, where such matters have been fairly disclosed to Air Products and
Air Liquide (or their advisers) in the period 10 July, 1999 to 12 July, 1999
(inclusive).
In addition, the Offeror shall not invoke any of Conditions 1(j) to (n)
inclusive in relation to matters or circumstances which would otherwise give
rise to a right to invoke any such Condition where the relevant matters or
circumstances have been fairly disclosed in the Annual Report and Accounts of
BOC or the interim results of BOC for the 6 months ended 31 March 1999 or any
public announcement issued by BOC on or prior to 12 July 1999.
The Offeror reserves the right to waive in whole or part all or any of
Conditions 1(b) to 1(n) inclusive. The Offeror reserves the right, subject to
the consent of the Panel, to extend the time allowed under the City Code for
satisfaction of Condition 1(a) until such time as Conditions 1(b) to 1(n) have
been satisfied, fulfilled or, to the extent permitted, waived.
The Offeror shall be under no obligation to waive, to determine to be or treat
as fulfilled any of Conditions 1(b) to 1(n) inclusive by a date earlier than the
latest date for the fulfilment thereof notwithstanding that the other Conditions
may at such earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such Conditions may
not be capable of fulfilment.
If the Offeror is required by the Panel to make an offer for any BOC Shares
under the provisions of Rule 9 of the City Code, the Offeror may make such
alterations to the Conditions as are necessary to comply with the provisions of
that Rule.
The Offer will lapse unless Conditions 1(b) to 1(n) are fulfilled or (if capable
of waiver) waived or, where appropriate, have been determined by the Offeror in
its reasonable opinion to be or to remain satisfied, by no later than 21 days
after the later of the first closing date of the Offer and the date on which the
Offer becomes or is declared unconditional as to acceptances, or such later date
as the Offeror may, with the consent of the Panel, decide.
If the Offer is extended into the United States, the Offeror will amend the
Conditions at the time the Offer Document is posted to the effect that Condition
1(a) may only be treated as satisfied at a time when all of the other Conditions
have been either satisfied, fulfilled or, to the extent permitted, waived and
make such consequential amendments as may be required to reflect the same.
32
The Offeror reserves the right to amend the Conditions at the time the Offer is
made to delete references to the Pre-Conditions in Conditions (b) to (e).
In the event that Pre-Condition (a) to the Offer is waived, the Offer will lapse
if the European Commission either initiates proceedings under Article 6(1)(c) of
the Merger Regulation or makes a referral to a competent authority of the United
Kingdom under Article 9(1) of the Merger Regulation and there is a subsequent
reference to the Competition Commission, before in each case the later of the
first closing date of the Offer and the time and date at which the Offer becomes
or is declared unconditional as to acceptances. In the event that Pre-Condition
(b) to the Offer is waived, the Offer will also lapse if the Offer is referred
to the Competition Commission before the later of the first closing date and the
time and date at which the Offer becomes or is declared unconditional as to
acceptances. If the Offer so lapses, the Offer will cease to be capable of
further acceptance and accepting BOC Shareholders and the Offeror will cease to
be bound by acceptances submitted before the time when the Offer lapses.
If the Offer is extended into the United States, the first closing date shall be
the day following the 20th US business day from the date of posting the Offer
Document.
2. FURTHER TERMS OF THE OFFER
Unless the Offeror determines otherwise, the Offer will not be made, directly
or indirectly, in or into, or by use of the mails or by any means or
instrumentality of interstate or foreign commerce of, or by any facilities of a
national, state or other securities exchange of Australia, Japan or Canada and
the Offer will not be capable of being accepted by any such use, means or
instrumentality or otherwise from or within Australia, Japan or Canada.
Accordingly, copies of this announcement are not being, and must not be, mailed
or otherwise distributed or sent in or into or from Australia, Japan or Canada.
In addition, this announcement does not constitute an extension of the offer
into the United States. It is intended to extend the Offer, if and when made,
into the United States in compliance with the procedural and filing requirements
of the Exchange Act and the rules of the SEC thereunder except to the extent
that exemptive relief therefrom is granted by the SEC. Because it is intended to
extend the Offer into the United States, it is expected that holders of BOC
Securities will be accorded the right to withdraw tendered securities until the
Offer becomes wholly unconditional.
33
The BOC Shares will be acquired by the Offeror fully paid and free from all
liens, charges, equities, encumbrances, rights of pre-emption and any other
rights of any nature and together with all rights now or hereafter attaching to
them, including the right to receive in full all dividends and other
distributions, if any, declared, made or paid after the date of this
announcement save as set out in this announcement.
34
APPENDIX III
LOAN NOTE ALTERNATIVE
Accepting shareholders will be entitled to elect to receive Loan Notes instead
of some of the cash consideration which would otherwise be receivable under the
Offer (the 'Loan Note Alternative') on the basis
FOR EVERY GBP1 OF CASH CONSIDERATION GBP1 NOMINAL OF LOAN NOTES
UNDER THE OFFER
The principal terms of the Loan Notes will be as set out below.
Issuer: The Offeror.
Governing Law: English law.
Form and Status: GBP1 nominal value. The Offeror's obligations under
the Loan Note will be guaranteed by a UK clearing
bank or in such other manner as may be agreed
with BOC.
Maturity date: 31 December 2003 (the 'Maturity Date').
Interest rate: Will be LIBOR less a percentage to be agreed with BOC.
Interest payment Interest payable in arrears on 30 June and
dates: 31 December in each year except that the first
interest payment date will be determined in accordance
with the closing date of the Offer.
Repayment and Redeemable at the holder's option at par on
redemption: 31 December 2000 and on each interest payment date
thereafter. Any Loan Notes not previously redeemed
will be repaid at par (together with accrued interest)
on the Maturity Date.
Redeemable by the Offeror at par on any interest
payment date prior to the Maturity Date if the
aggregate value of Loan Notes in issue is less
than a threshold to be agreed with BOC.
35
On a redemption on the Maturity Date the Offeror
will have the right to pay each Noteholder an
amount in US dollars equal to the amount in US
dollars that the sterling amount equal to the
principal amount of the Loan Notes to be redeemed
could have purchased on the date being 28 days
before the Maturity Date, provided that such
amount shall be no less or more than 99.5 per
cent. or 100.5 per cent. of the amount in US
dollars that the sterling principal amount of the
Loan Notes to be redeemed could have purchased on
the Maturity Date.
Redeemable by the Offeror at par on any interest
payment date if interest payable under the Loan
Notes falls to be treated as a distribution or
otherwise non-deductible for tax purposes.
Events of default: Noteholders shall be entitled to require redemption
of Loan Notes on events of default specified in the
instrument constituting the Loan Notes and which are
to be specified in the Offer Document.
Substitution or The Offeror will be entitled, without the consent of
Exchange: Noteholders, to substitute on one or more occasions,
any subsidiary of the Offeror and/or any member of the
Air Liquide Group and/or any member of the Air Products
Group as the principal debtor under the Loan Notes
(or any part thereof) or to require such holders to
exchange their Loan Notes (or any part thereof)
for Loan Notes issued on the same terms by any
subsidiary of the Offeror and/or any member of the
Air Liquide Group and/or any member of the Air
Products Group. The obligations of any such
substituted or new issuer will be suitably guaranteed.
Registration: The Loan Notes will be registered and transferable
in minimum amounts of GBP5,000 or the entire value
of the noteholding.
Listing: The Loan Notes will not be listed.
36
APPENDIX IV
FINANCING ARRANGEMENTS
FINANCING FOR AIR LIQUIDE
Air Liquide is to finance its share of the consideration for the Offer by means
of a credit agreement made between itself (as original borrower and guarantor),
Banque Nationale de Paris and Credit Agricole Indosuez (as lead arrangers), the
financial institutions named in the credit agreement (as lenders) and Credit
Agricole Indosuez (as agent). The credit agreement provides for (i) a 364 day
sterling denominated revolving credit facility (with 6 month 'term out' option)
in a maximum principal aggregate amount of GBP1,300,000,000 to be used for
general working capital purposes and to provide short term bridge funding for
Air Liquide; (ii) a 3 year sterling denominated revolving credit facility in a
maximum principal amount of GBP1,500,000,000; and (iii) a 5 year sterling
denominated revolving credit facility in a maximum principal amount of
GBP1,500,000,000 (ii) and (iii) of which are to be used to finance, among other
things, an element of the cash consideration payable pursuant to the Offer, to
finance the payment of certain related costs and fees and to refinance certain
debt.
FINANCING FOR AIR PRODUCTS
Air Products will finance its share of the consideration for the Offer by means
of a credit agreement among itself as the initial borrower, the additional
borrowers parties thereto, the lenders parties thereto, Chase Securities Inc. as
lead arranger and The Chase Manhattan Bank as administrative agent. The credit
agreement provides to Air Products and certain additional borrowers a revolving
credit facility in the maximum commitment amount of GBP3,950,000,000 to be used
to finance the Offer (including capitalisation of the Offeror by means of debt
and/or equity and cash collateralisation of the Loan Notes), to refinance
existing indebtedness, to pay fees and expenses in connection with the Offer and
the financing thereof, to support commercial paper issued by Air Products, and
to provide for the working capital and general corporate needs of Air Products
and its subsidiaries.
The financing under the credit agreement is divided into two facilities, (a) a
GBP3,450,000,000 facility with a 364 day revolving commitment, "subject to a one
year 'Term Out' option in certain circumstances and (b) a GBP500,000,000
facility with a 5 year revolving commitment, payable on the fifth anniversary of
the effective date of the credit agreement.
37
APPENDIX V
BASES AND SOURCES
GENERAL
Save as otherwise set out in this announcement, the following constitute the
bases and sources of financial information and calculations referred to in this
announcement:
FINANCIAL INFORMATION
Unless otherwise stated: (i) financial information relating to Air Liquide has
been extracted from its Annual Report and Accounts for the year ended
31 December, 1998; (ii) financial information relating to Air Products has been
extracted from its Annual Report on Form 10-K for the fiscal year ended
30 September, 1998 and its Quarterly Report on Form 10-Q for the quarterly
period ended 31 March, 1999; and (iii) financial information relating to BOC
has been extracted from the Annual Report and Accounts of BOC and the interim
statement of BOC for the six months ended 31 March, 1999.
VALUE OF THE OFFER
The Offer values the entire issued ordinary share capital of BOC at
approximately GBP7.2 billion based on the Offer price for each BOC Share of
1460 pence and approximately 491 million BOC Shares being in issue on
12 July (the last practicable date prior to the date of this announcement).
SHARE PRICE OF BOC SHARES
The price of BOC Shares at the close of business on a particular date is derived
from the Official List.
EXCHANGE RATES
All exchange rates are as at 9 July, 1999. The exchange rates used, as sourced
from the Financial Times dated 12 July, 1999, are GBP1:FFr9.9963 and
GBP1:USD1.5528.
38
FORECAST GASES GROWTH
The statement under the heading 'Benefits to Air Products' that the combination
of Air Products' existing industrial gases operations and selected BOC
operations will create a leading company in countries representing over 65 per
cent. of the world's forecast gases growth over the next ten years is derived
from Air Products' own internal econometric model for projecting industrial gas
consumption on a country by country basis.
39
APPENDIX VI
DEFINITIONS
The following definitions apply throughout this document unless the context
otherwise requires:
'Air Liquide' L'Air Liquide S.A.
'Air Liquide Group' Air Liquide and its subsidiary undertakings
and, where the context permits, each of them
'Air Products' Air Products and Chemicals, Inc.
'Air Products Group' Air Products and its subsidiary undertakings
and, where the context permits, each of them
'Annual Report and the annual report and audited accounts of
Accounts of BOC' BOC for the year ended 30 September, 1998
'Australia' the Commonwealth of Australia, its
territories and possessions
'BOC' The BOC Group plc
'BOC ADRs' American Depositary Receipts evidencing
interests in BOC ADSs
'BOC ADSs' American Depositary Shares of BOC, each
representing 2 BOC Shares
'BOC Group' BOC and its subsidiary undertakings and,
where the context permits, each of them
'BOC Securities' BOC Shares and BOC ADRs
'BOC Share Option all executive and employee-wide share option
Schemes' and other incentive schemes established
by BOC under which any employee and/or
director has unexercised options or
other rights in respect of BOC Shares
40
'BOC Shares' the existing unconditionally allotted or
issued and fully paid ordinary shares of
25p each in the capital of BOC and any
further shares which are unconditionally
allotted or issued prior to the date on
which the Offer closes (or such earlier date
or dates, not being earlier, unless the
Panel so permits, than the date on which
the Offer becomes unconditional as to
acceptances or, if later, the first closing
date of the Offer, as the Offeror may decide)
'Canada' Canada, its provinces and territories and
all areas subject to its jurisdictions and
any political sub-divisions thereof
'cash flow per share' net income before capital gains plus
minorities, deferred tax, depreciation
and amortisation on a per share basis
'City Code' The City Code on Takeovers and Mergers
'Companies Act' the Companies Act 1985, as amended
'Conditions' the conditions of the Offer set out in
Appendix II and 'Condition' means any
one of them
'EBITDA' earnings before interest, tax, depreciation,
amortisation and exceptional items on
continuing operations
'enterprise value' the equity value of the Offer at the Offer
price plus the book value of net debt and
minorities as at 30 September, 1998
'Exchange Act' the United States Securities Exchange Act
of 1934, as amended
'Form of Acceptance' the form of acceptance relating to the Offer
which will accompany the Offer Document and
'Forms of Acceptance' shall be construed
accordingly
41
'Goldman Sachs' Goldman Sachs International
'Hoare Govett' Hoare Govett Limited
'Japan' Japan; its cities, prefectories, territories
and possessions
'J.P. Morgan' J.P. Morgan Securities Ltd.
'Lazard' Lazard Brothers and Lazard Freres et Cie.
'Lazard Brothers' Lazard Brothers & Co., Limited
'Loan Note' the unsecured loan notes to be issued by the
Offeror pursuant to the Loan Note
Alternative, having the rights and being
subject to the restrictions summarised
in Appendix III
'Loan Note Alternative' the right of eligible BOC shareholders who
validly accept the Offer to elect to
receive Loan Notes instead of all or
part of the cash to which they would
otherwise have been entitled under the
Offer
'London Stock Exchange' London Stock Exchange Limited
'Morgan Stanley' Morgan Stanley & Co., Limited
'Noteholder' a holder of Loan Notes
'Offer' the recommended offer to be made by Lazard
Brothers, Morgan Stanley and Goldman Sachs
on behalf of the Offeror to acquire the
BOC Shares and, subject as described in
this document, BOC ADSs, once the
Pre-Conditions have been satisfied or waived,
on the terms and conditions to be set out
in the Offer Document including, where the
context requires, any subsequent revision,
variation, extension or renewal of such offer
42
'Offer Document' the document to be dispatched on behalf of
the Offeror to holders of BOC Shares
(other than to certain overseas
shareholders) and, subject as described
in this document, BOC ADSs, once the
Pre-Conditions have been satisfied or
waived, containing and setting out the
terms and conditions of the Offer
'Offeror' the UK company to be jointly owned by
Air Liquide and Air Products on whose behalf
the Offer will be made
'Official List' the Daily Official List of the London Stock
Exchange
'Panel' The Panel on Takeovers and Mergers
'Pre-Conditions' the pre-conditions to posting of the Offer
Document and related Forms of Acceptance
set out in Appendix I and 'Pre-Condition'
means any one of them
'SEC' the US Securities and Exchange Commission
'subsidiary', shall be construed in accordance with the
'subsidiary Companies Act (but for this purpose
undertaking', ignoring paragraph 20(i)(b) of
'associated Schedule 4A of the Companies Act)
undertaking' and
'undertaking'
'UK' or 'United Kingdom' the United Kingdom of Great Britain and
Northern Ireland
'US' or 'United States' the United States of America, its
territories and possessions, and State
of the United States of America and the
District of Columbia and all other areas
subject to the jurisdiction of the
United States
43
'Wider Air Liquide Group' Air Liquide and its associated undertakings
and any other body corporate,
partnership, joint venture or person in
which Air Liquide and such undertakings
(aggregating their interests) have an
interest of more than 20 per cent. of
the voting or equity capital or the
equivalent
'Wider Air Products Group' Air Products and its associated undertakings
and any other body corporate,
partnership, joint venture or person in
which Air Products and such undertakings
(aggregating their interests) have an
interest of more than 20 per cent. of
the voting or equity capital or the
equivalent
'Wider BOC Group' BOC and its associated undertakings and any
other body corporate, partnership, joint
venture or person in which BOC and such
undertakings (aggregating their
interests) have an interest of more than
20 per cent. of the voting or equity
capital or the equivalent
44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Air Products and Chemicals, Inc.
-----------------------------------------
(Registrant)
Dated: 13 July 1999 By: /s/ Leo J. Daley
---------------------------------------
Leo J. Daley
Vice President - Finance
(Chief Financial Officer)
