This is a part of the 2017 Distribution Trends Special Issue. The annual feature was researched and written by MDM based on interviews with dozens of distributors, industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2017 Distribution Trends Special Issue
Another year, another blockbuster merger. As gases & welding equipment distributors worked through the Air Liquide-Airgas deal, consolidation shook the sector for a second straight year with another blockbuster transaction – the $70 billion merger of German industrial gases group Linde AG and Praxair Inc., Danbury, CT. Though officially announced in May and inked in June with an expected close date of 2018, the deal began making waves last fall when the companies began on-again, off-again talks of uniting. “The combined company will give us the opportunity to leverage the individual strengths of both companies across a much larger global footprint and enhance our ability to drive innovation and growth," said Steve Angel, CEO of Praxair.
The combined company will also drive changes throughout the gases & welding equipment sector. Like last year's Air Liquide-Airgas deal, this transaction will make some suppliers that work with distribution "a little bit nervous," according to Bill Visintainer, owner, Atlas Welding Supply Co. Inc., Tuscaloosa, AL, and 2016 president of the Gases and Welding Distributors Association. "As they get fewer and fewer customers that are distributors, I guess those fewer and fewer distributors who are comprising more and more of their sales into the marketplace have a bigger say, don't they? A guy that represents 1 percent of their business doesn't have the same voice as someone who might represent 25 percent of their business."
Sector hopeful for new administration to "ease regulatory burden." A heavily regulated industry like gases & welding distribution is sure to welcome fewer rules regarding its products and practices. While encouraged by the initial words and actions of President Trump, the industry is cautiously optimistic about further relief from Washington, according to Richard Schweitzer, whose op-ed in the latest edition of Welding and Gases Today outlined some of the administration's early business-friendly moves. "How all of this will work is yet to be determined, but it marks a sharp departure from the regulatory approach of prior administrations from either political party," Schweitzer wrote. "President Trump is trying to streamline the government and allow business leaders to make new investments in the American economy. This provides an opportunity for all businesses, small and large, to take advantage of the new environment in Washington."
Proposed Helium Extraction Act of 2017 gets hearing. "The Helium Extraction Act of 2017 would remove an obstacle to extracting helium from federal land, particularly in the Southwestern United States, where high helium concentrations are present in some deposits of non-hydrocarbon gas," according to a Gasworld article. The Energy and Resources Subcommittee of the House Committee on Natural Resources held a hearing about the act on June 21.