Praxair

Is it really possible to be an “A” company in a “C” industry, especially when starting as a “C” player? In the late ‘80’s and early ‘90’s Praxair’s then parent company, decided to exit the low-margin, high-cost packaged gases (cylinder) segment of the industrial gas industry. But in 1994 different market conditions, and a stronger balance sheet, following Praxair’s spin-off as an independent company, warranted re-entering this $8B market, where sales of packaged gases and consumable hardgoods, primarily to the metal fabrication industry, comprise 70% of the total revenue. Despite its long association with the industry, Praxair re-entered the market as a “C” player, aggressively acquiring over 100 small, regional distributors in the U.S. and Canada to gain market share, as well as to secure a position in a business with good fundamentals. In the early stages of this acquisition period, it was unclear what the end game strategy would actually be. After several...