German Industrial Gas Giant Messer Courts Sovereign Wealth Funds

Aaron Kirchfeld, Eyk Henning and Dinesh Nair
Mon, January 30, 2023



(Bloomberg) -- Messer SE, the German industrial gas maker that’s been controlled by its namesake family for more than a century, is in talks to bring in external investors to raise money for deals.

The company has sounded out sovereign wealth funds including Singapore’s GIC Pte and the Abu Dhabi Investment Authority, as well as EQT AB’s infrastructure arm, according to people familiar with the matter. Messer could use the proceeds to buy full control of a joint venture with CVC Capital Partners, they said.

The joint venture, known as Messer Industries GmbH, owns former Linde assets in North and South America. The business’s equity may be valued at as much as €7 billion ($7.6 billion), some of the people said. It also has about €2 billion in debt on top of that, they said, asking not to be identified because the information is private.

Messer and CVC agreed to create the joint venture in 2018 to buy assets being sold by Linde to secure antitrust approval for its $46 billion merger with Praxair Inc.

Bad Soden-based Messer’s operations have more than 11,000 employees globally and reported €3.5 billion of sales in 2021, according to its website. The company, which focuses on industrial, medical and specialty gases, competes with companies such as Air Liquide SA and Air Products & Chemicals Inc.

Beyond industrial gases, the company also builds cutting systems and gas control equipment. The family shareholders are represented by Chief Executive Officer Stefan Messer, as well as his son Marcel Messer, a management consultant.

Messer has an option to buy out CVC from March, which has triggered the group’s hunt to find funds to pursue a deal, the people said. As part of the original 2018 agreement, both sides agreed on a formula that determines the value of the JV, they said.

Talks with potential investors may not lead to a transaction, according to the people. CVC hasn’t decided whether it wants to sell and also has the option to pursue an IPO of the venture next year, they said.

While buying out the joint venture and bringing on an external investor could pave the way for an IPO of the group down the road, CEO Stefan Messer has repeatedly said he prefers to keep the family-owned company private.

Representatives for ADIA, CVC, GIC, EQT and Messer declined to comment.

If a deal is reached, it could mark the first signs of an improvement in German dealmaking. Mergers and acquisitions in the country are down almost 80% so far this year, after declining nearly a third in 2022, as firms struggle to raise financing amid the risk of a recession and the war in Ukraine.

The Middle East’s sovereign wealth funds, flush with oil revenue, have become a key port of call for companies looking to raise financing. They’re helping Gulf countries diversify their economies and build influence at a time when other sources of capital are drying up.

--With assistance from Jan-Henrik Förster, Kiel Porter and Elffie Chew.