Industrial gas producer and supplier Praxair Inc. PX recently announced that it has completed the acquisition of the European carbon dioxide business of Yara International ASA. The move is likely to boost the company’s business in the food and beverage industry.
The company’s decision to acquire Yara’s European carbon dioxide business along with the plan to purchase Yara’s 34% stake in the Yara Praxair Holding AS industrial gas joint venture in Scandinavia was announced in Sep 2015. Back then, the twin transaction was valued at €312 million.
Presently, Praxair has refrained from disclosing the financial terms of the transaction. However, the company divulged that it has finalized the purchase of Yara’s stake in the Scandinavian joint venture.
We believe Praxair’s constant endeavor to expand its business through inorganic means will prove beneficial, going forward. In 2015, the company’s acquired assets contributed roughly 1% to top-line growth. In Apr 2016, the company acquired five industrial gas businesses while in March, it took over NOxBOX Ltd. from U.K. based Bedfont Scientific Limited. Such strategic acquisitions reflect the company’s sound cash position as well as its initiative to meet the growing needs for industrial gases and related services.
In addition, Praxair boasts a diversified product portfolio and a large worldwide client base. Despite the long-term positives, the company’s exposure to certain near-term headwinds has restricted its growth momentum. Currently, the stock has a market capitalization of $31.5 billion and carries a Zacks Rank #3 (Hold).
Some of Praxair’s prime competitors are performing well, having gained high investment rankings. These stocks include Albemarle Corporation ALB, Axiall Corporation AXLL and Innophos Holdings Inc IPHS. All these stocks sport a Zacks Rank #1 (Strong Buy).
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