ICBC contributes to $12 billion syndicated bridge loan to Air Liquide to finance its acquisition of Airgas, Inc.

Project narrative

On December 17, 2015, a syndicate of 16 banks, including the Industrial and Commercial Bank of China (ICBC), signed a $12 billion USD syndicated bridge loan agreement with Air Liquide Finance S.A. — a France-incorporated financing wholly-owned subsidiary of L'Air Liquide S.A., a France-incorporated and Paris-headquartered French multinational industrial gas and chemical company listed on the Euronext Paris — to finance Air Liquide's acquisition of American industrial gas supplier Airgas, Inc. This loan carried a maturity period of 12 months with options to extend and an interest rate based on a variable plus a margin, reportedly a typical pricing structure with step-ups over time. In addition to ICBC, the following lenders contributed to the loan syndicate: Barclays Bank Plc, BNP Paribas S.A., the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), Citibank N.A., Commerzbank AG, Crédit Agricole Group, HSBC, Intesa Sanpaolo S.p.A., JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., Natixis, Société Générale S.A. (SocGen), Sumitomo Mitsui Banking Corporation (CMBC), Groupe Crédit Mutuel, and Royal Bank of Scotland (RBS). Barclays and BNP Paribas fully underwrote the facility. BTMU, Citi, Commerzbank, Commerzbank, Crédit Agricole, HSBC, Intesa Sanpaolo, JPMorgan, Mizuho, Natixis, SocGen, and SMBC served as mandated lead arrangers. ICBC, Crédit Mutuel, and RBS served lead arrangers, taking smaller tickets than the mandated lead arrangers in the three-tier syndication. All of the lenders were relationship banks of Air Liquide and had contributed to a 2013 facility. The proceeds were to be used by the borrower to support its all-cash acquisition of Airgas, an American competitor to Air Liquide. Headquartered in Radnor Township, Pennsylvania, Airgas was the leading distributor of industrial, medical and specialty gases in the United States, selling canisters of oxygen and other gases to over a million customers. On November 18, 2015, Air Liquide announced that it had entered into an agreement to purchase a 100% stake in Airgas, Inc. for an all-cash consideration of $143 USD pre share in cash or $13.4 billion USD (€12.5 billion EUR), representing a premium of 50.6% to Airgas' one month average share price. The acquisition would give Air Liquide a strong presence in the U.S. market, a strong platform, distribution networks in North America, and leadership in the packaged gas business held by Airgas. The founder and chairman of Airgas, Peter McCausland sought buyers for Airgas including ChemChina and Koch Industries before agreeing to Air Liquide's offer. At the time of the bridge loan, the acquisition was expected to be completed in 2016. The acquisition was completed on May 23, 2016. Only five out of 17,000 Airgas jobs were lost during the integration of the two companies. Air Liquide intended to refinance the facility via an equity raise ranging between €3 billion EUR and €4 billion EUR and by the issuance of long term U.S. dollar and euro bonds. In June 2016, Air Liquide release its final terms for a €12 billion EUR medium term note programme to refinance the bridge loan facility.