Another $1 billion! Air Products hit again by activist investors

Air Products & Chemicals, a U.S. industrial gas giant, has recently run into trouble—repeatedly targeted by activist investors. Global hedge fund D.E. Shaw announced it has accumulated approximately $1 billion worth of shares in Air Products & Chemicals, making it the company’s second-largest activist investor. With over $60 billion in assets under management, D.E. Shaw ranks among the world’s largest hedge funds. Although D.E. Shaw attempted private dialogue with Air Products, it was rebuffed. Demanding Board Overhaul and a CEO Successor According to insiders, D.E. Shaw plans to nominate three directors to Air Products’ board. This move has drawn support from another activist investor, Mantle Ridge, which earlier this week stated it had acquired over $1 billion in Air Products shares. Mantle Ridge wants the company to cut costs, focus on core businesses, and pave the way for new leadership. The activists’ shared goal is to push Air Products to establish a clear succession plan for its 80-year-old CEO, Seifi Ghasemi—one of the oldest CEOs among S&P 500 companies. Scott Sutton, former CEO of Olin, is considered a leading candidate to succeed him. Air Products has undergone significant management upheaval this year: Chief Operating Officer (COO) Samir Serhan abruptly resigned in July. Meanwhile, the company announced the formation of a new Management Committee led by CEO Seifi Ghasemi. Unlike D.E. Shaw—which currently seeks only three board seats—Mantle Ridge takes a more aggressive stance, aiming to seize control of the entire board via a proxy fight. Moreover, D.E. Shaw, Mantle Ridge, and numerous analysts point out that Air Products’ employment contract with CEO Ghasemi is overly generous—and contains no provisions addressing his retirement or successor planning. Major Projects Lack “Off-take Agreements,” Facing Significant Risk

Air Products fights back against activist investors! News of a new CEO emerges

After months of mounting pressure from activist investors, Air Products has finally launched a counteroffensive! Ahead of its annual general meeting, the company issued a letter to shareholders urging them to vote for its own director nominees—not those proposed by activists—and unveiled a timeline for CEO succession. According to Air Products’ official website, as cited by Gas Expo, the company’s Board of Directors released a letter to shareholders on December 4, highlighting key information shareholders should consider ahead of the 2025 Annual General Meeting. First, Air Products emphasizes that it is the world’s most profitable industrial gas company. “Adjusted EBITDA margins for Air Products’ core industrial gas business have reached an all-time high—leading the industry—and are driving earnings per share (EPS) growth. We continue to strengthen our core industrial gas business, having allocated over 50% of total capital expenditures to it over the past four years, while simultaneously developing the clean hydrogen market.” Second, Air Products states that its first-mover advantage in the clean hydrogen space is already yielding results. “Deloitte research shows clean hydrogen presents enormous value-creation opportunities for shareholders: revenues are projected to exceed $600 billion by 2030 and surpass $1 trillion by 2050. Air Products recently signed a 15-year agreement with TotalEnergies to supply 70,000 metric tons of green hydrogen annually starting in 2030—demonstrating strong near-term demand.” Third, Air Products continues prudent capital allocation to mitigate risks in its hydrogen business while delivering effective returns to shareholders. “Under the CEO’s leadership, disciplined capital allocation has enabled us to reduce risk in our hydrogen business, invest in new projects expected to meet or exceed our internal return targets, and increase the compound annual growth rate of dividends per share by 9%. Furthermore, with capital expenditures slowing, we expect to enhance shareholder capital returns through higher dividends and share repurchases.” Fourth, Air Products’ Board is actively identifying potential CEO successors. “In August, Air Products announced it is searching for a President who will serve as a qualified successor to current CEO Seifi Ghasemi and join the Board. The President appointment—and the related ‘CEO succession timeline’—will be announced no later than March 31, 2025.” “Additionally, the Board has undergone meaningful renewal: six of its nine directors were appointed within the past five years—including two newly nominated directors, Bob Patel and Alfred Stern—who bring extensive experience in leading and overseeing publicly traded companies.” Fifth, replacing the entire Board would undermine stability, destroy value, and jeopardize Air Products’ future. “Activist investor Mantle Ridge is attempting to take full control of the company and halt our growth momentum without thoughtful planning. Holding only about 1.8% of shares, Mantle Ridge seeks to replace all Air Products directors with its unqualified nominees—and to replace both the CEO and executive leadership team.” “The Board believes Mr. Ghasemi remains the right leader at this time—his track record transforming Air Products into the world’s most profitable industrial gas company proves it—and we stand at a pivotal moment executing our clean hydrogen strategy.”

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