The Scoop
Activist investor Elliott Management has amassed a stake in French industrial giant Air Liquide and is pushing management to bolster its lagging profit margins, according to people familiar with the matter.
Air Liquide, a $120 billion company which makes gases and chemicals, has traded at a discount to its chief competitor, Linde, in part, because of its weaker margins. Elliott has told the company that it believes Air Liquide’s margin gap can be fixed and that it can benefit from the global AI buildout, some of these people said. Much of Air Liquide’s revenue comes from stickier, guaranteed projects built alongside its customers’ manufacturing facilities, which also gives it a leg up over Linde.
The size of Elliott’s stake could not be learned, but Air Liquide requires shareholders disclose when they cross over a 2% economic interest. Air Liquide is scheduled to meet with analysts at an October investor day, where CEO Francois Jackow is expected to talk about his turnaround plan.
Elliott and Air Liquide declined to comment.
Know More
Elliott has deep experience in Europe: the company has had a London office for more than two decades and has run campaigns at some of the largest companies in the region, including an ongoing push at BP and past efforts at Bayer and Pernod Ricard. The multi-strategy fund made a name for itself through activism and manages roughly $80 billion.
Activism in France is tricky: The country has intervened to protect national champions before, and has an unusual law which gives long-standing shareholders double voting rights, a potential roadblock to a proxy fight from shorter-term investors.
Notable
- The French government’s protectionist streak spans multiple industries, including an 2005 intervention at Danone that earned derision as the “strategic yogurt” matter.