China’s Yingde Gases awaits offer from suitor as infighting between board continues

“When the snipe and the clam grapple, it is the fisherman who wins,” a Chinese proverb goes. In the case of Yingde Gases Group’s infighting among its board of directors and major shareholders, a “win-win” scenario is possible if the fisherman – United States-based Air Products – can offer a good enough price to buy out Yingde’s shareholders.

But amid ongoing bickering between the two camps of Yingde’s directors, and the absence of a solid offer from global rival Air Products which in December expressed a non-binding interest to take over Shanghai-based Yingde, it is far from clear how the corporate drama will end.

What’s clear is that there is no sign the rift between the opposing sides has narrowed.

At stake is the future of one of China’s largest suppliers of industrial gases such as oxygen, hydrogen and nitrogen, with some 70 facilities supplying many of the nation’s steel and chemical plants, in an industry that has seen global consolidation in recent years.

According to UK-based gasworld Business Intelligence, in 2015 Yingde had a 13 per cent share of China’s industrial gases market by revenue, compared to 16 per cent for Germany’s Linde, 14 per cent for French supplier Air Liquide and 9 per cent for Air Products.

Yingde chairman Zhao Xiangti, who in early November replaced former chairman and chief executive Sun Zhongguo, claimed to be the saviour of a debt-troubled company.