#Sweden #Lund #Alfa Laval #Fives Group #Cryogenics

Alfa Laval's Significant Acquisition in the Cryogenics Sector

In a strategic move to solidify its standing in the market, Alfa Laval, a leading global provider of heat transfer, separation, and fluid handling products, has officially signed a binding put-option agreement to acquire the Fives Cryogenics business unit. This division is part of the French industrial group Fives and is considered a leader in cryogenic heat transfer and pump technologies. The purchase agreement entails a total fixed price of EUR 800 million, established on a cash and debt-free basis, highlighting Alfa Laval's commitment to advancing its technological capabilities.

Fives Cryogenics boasts over 60 years of experience and is headquartered in France, with manufacturing facilities in China and Switzerland. The organization employs more than 700 individuals and posted revenues of approximately EUR 200 million in 2024. As the cryogenics industry plays an increasingly vital role in sectors involving traditional gases like LNG and the burgeoning areas of hydrogen and carbon capture, this acquisition is poised to further enhance Alfa Laval's market presence.

Tom Erixon, President and CEO of Alfa Laval, expressed optimism regarding the synergy between the two companies. According to him, integrating Fives Cryogenics into Alfa Laval's operations will significantly enhance their capabilities in promoting energy efficiency and facilitating the energy transition. Erixon remarked, "By adding cryogenic technologies to the Alfa Laval portfolio, we would expand our capabilities to move energy efficiency and the energy transition forward."

This acquisition is subject to consultations with relevant works councils and is expected to culminate in a definitive purchase agreement soon. Upon completion, the cryogenic division will be integrated into Alfa Laval's Energy Division, operating as a distinct business unit, which will allow it to benefit from Alfa Laval's extensive global reach and technological prowess.

Frédéric Sanchez, CEO of Fives Group, underscores the benefits of this acquisition, emphasizing that partnering with an industrial group like Alfa Laval will greatly support Fives Cryogenics in its growth trajectory. "With Alfa Laval, Fives Cryogenics would have a strong owner who I know would develop the company and the team further," he stated, aligning with the strategic vision of both companies.

Moreover, the financing for this all-cash transaction will be facilitated through existing liquidity and debt resources. It is anticipated that the revenue generated by Fives Cryogenics will be neutral to positive for Alfa Laval's group margin, with projections for future revenues estimated between EUR 200-250 million.

The closure of the transaction necessitates regulatory approvals, and it is expected to be finalized during 2025. As the world shifts towards efficient energy solutions, the integration of Fives Cryogenics into Alfa Laval's portfolio not only represents a significant step towards enhancing its technological capabilities but also aligns with the broader mission of promoting sustainability and energy efficiency across global markets. The acquisition stands testament to Alfa Laval's commitment to optimizing processes and fostering responsible growth, ultimately aiding customers in achieving their business objectives and sustainability targets.

As a company with a rich history of 140 years and a workforce of over 22,300 employees, Alfa Laval is dedicated to driving innovations that make a lasting positive difference. With clients across 100 countries and annual sales reaching SEK 66.9 billion, this latest acquisition serves as a catalyst for its ongoing development in the rapidly evolving energy sector, paving the way for a sustainable future.

In summary, the acquisition of Fives Cryogenics by Alfa Laval represents more than merely a transaction; it is a strategic alignment of technology and market capabilities that seeks to answer the increasing demand for sustainable energy solutions across the globe. This partnership promises to enhance operational efficiencies and bolster international competitiveness in the face of transformative global energy trends.