Air Liquide eyes investor returns and margin gains, but retains scope for major deal

By Olivier Cherfan

Oct 5 (Reuters) - Industrial gases provider Air Liquide said on Monday it would launch a €4 billion ($4.5 billion) share buyback programme and aimed to raise its operating margin by 400 to 600 basis points by 2030, while leaving the door open for a major acquisition.

Air Liquide's more than €40 billion capital allocation plan under the new 2026-2030 strategy includes share repurchases running until end-2028 alongside growing dividends, even as it continues to invest in faster-growing markets such as AI-driven semiconductors.

While the French company is not expecting another deal on the scale of DIG Airgas, which it agreed to buy in August, its strong balance sheet leaves scope for a major acquisition if the right opportunity arises, management told reporters ahead of Monday's investor event.

The strategy aligns with calls from Elliott Investment Management, which has reportedly built an undisclosed stake and urged Air Liquide to seek stronger margins, efficiency and capital returns.

The company declined to comment on activist involvement, with CEO François Jackow saying the new strategy was "100% Air Liquide".

AMERICAS TO OVERTAKE EUROPE

Sales of the electronics unit, which accounts for about a 10th of Air Liquide's activity, are expected to grow by at least 10% per year through 2030, driven by AI, data centres and a push for chip sovereignty. It also expects the Americas to overtake Europe as its largest region during the strategy period.

"Europe is number one today, but there will be a shift during the plan, alongside growth in Asia," Jackow said.

Air Liquide shares gained 2.3% by 1133 GMT, as Jefferies analysts noted that the management was known for giving conservative guidance at the start of a strategic period and upgrading it through the cycle.

Based on the guidance and consensus estimates, Air Liquide's margin gap to rival Linde could narrow to between 5.5 and 7.5 percentage points by 2030, compared to a forecasted gap of 8 percentage points at the end of this year, Jefferies said in a note to investors.

The company has been seeking to narrow the profitability gap with Linde through price hikes, cost cuts and semiconductor growth.

Air Liquide said it was currently using AI for productivity and new services rather than targeting broad job cuts, though it added that workplace changes could eventually deepen.

($1 = €0.8935)

(Reporting by Olivier Cherfan in Gdansk, editing by Milla Nissi-Prussak)