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Business deals

Japanese industrial gas supplier buys Indian ops for $194m

Air Water purchases facilities divested in Linde-Praxair merger

Japan's Air Water seeks to capture demand for industrial gas from India's steel industry.   © Reuters

OSAKA -- Japanese industrial gas producer Air Water said Wednesday that it will acquire Indian facilities from German peer Linde for 13.8 billion rupees ($194 million), as the company stretches its footprint in India from the northeast into much of the south.

Air Water looks to capture demand from India's expanding steel manufacturing sector, as well as from the automotive industry.

The company will take over three locations from Linde: a gas plant in the southern state of Karnataka, and cylinder filling stations in the southern cities of Hyderabad and Chennai. These operations took in combined sales of 3.87 billion rupees in 2018.

The gas plant, located at a steel production center operated by India's JSW Steel, delivers oxygen to blast furnaces. The cylinder filling stations are located in the heart of India's auto industry, from which Air Water foresees growing gas sales.

Air Water entered India in 2013 when it bought out local supplier Ellenbarrie Industrial Gases. This operation mostly transported gas to metalworking companies in eastern India.

The facilities of Ellenbarrie, Air Water's subsidiary in India.

Opportunity knocked for the Japanese company when Linde and U.S. industrial gas provider Praxair decided to merge in a deal finalized this spring. To comply with India's antitrust regulations, the two companies agreed to divest assets in the country.

In July, Air Water acquired a gas plant and two cylinder filling stations from Praxair in eastern states. This was followed up by the deal with Linde, which is set to close by December.

Air Water ranks as the second-leading industrial gas provider in Japan after Taiyo Nippon Sanso. It grew by developing a variety of clients, including those in the medical and restaurant sectors.

The company now positions overseas markets as the next growth center. Air Water aims to lift the ratio of offshore sales to 10% by the fiscal year ending March 2022, up from 5% this financial year.

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