Messer SE has sealed an investment from GIC Pte that values the industrial gas maker at more than €12 billion ($12.9 billion) including debt, people with knowledge of the matter said, marking the second mega deal in as many months for a century-old, family-owned company in Germany.

Singaporean sovereign wealth fund GIC is set to pay around €2 billion for a less than 25% stake in Bad Soden-based Messer, according to the people, who asked not to be identified discussing confidential information. A deal could be announced as soon as Tuesday, they said.

Messer is using the proceeds to help buy full control of Messer Industries GmbH, a joint venture it runs with private equity firm CVC Capital Partners. The deal to buy out CVC may give Messer Industries a value of about €8 billion, the people said. The two parties agreed to create the JV in 2018 to buy North and South American assets being sold by Linde to secure antitrust approval for its $46 billion merger with Praxair Inc. Messer Industries also houses assets in Western Europe.

A deal between GIC and Messer, which is celebrating its 125-year anniversary, will mark the second marquee investment in a family-owned German industrial group in quick succession. In April, 106-year old manufacturing company Viessmann agreed to sell most of its business to US air conditioner maker Carrier Global Corp. for about €12 billion, a rare purchase of a so-called Mittelstand company.

Representatives for Messer and CVC declined to comment, while a spokesperson for GIC couldn’t immediately be reached for comment.

While taking control of the JV and bringing on an external investor could pave the way for an IPO of Messer down the road, Chairman Stefan Messer has repeatedly said he prefers to keep the family-owned company private.

Founded in 1898, Messer’s operations have around 11,000 employees globally and reported about €4.2 billion of sales in 2022. The company, which focuses on industrial, medical and specialty gases, competes with the likes of Air Liquide SA and Air Products & Chemicals Inc. Beyond industrial gases, it also builds cutting systems and gas control equipment.

Bloomberg News reported in January that Messer was in talks to raise funds from external investors and had sounded out sovereign wealth funds and buyout firms, and then earlier this month that GIC had emerged as the frontrunner. The value of industrials deals globally stands at $152 billion this year, according to data compiled by Bloomberg, down around 38% on the same point in 2022.

GIC manages about $690 billion in assets, according to research firm Global SWF. The wealth fund has been a prolific investor in recent years, often leveraging relationships with private equity firms to partner on transactions.

In 2021, it invested alongside Blackstone Inc., Carlyle Group Inc. and Hellman & Friedman to buy Medline Industries Inc. in one of the largest buyouts ever. That same year, it acquired 30% stake in Cetin Group BV, which operates phone and data networks in central and eastern Europe, from the heirs of late Czech billionaire Petr Kellner.

--With assistance from Vinicy Chan.

(Updates with terms of deal from second paragraph, GIC deals in final two paragraphs.)

Author: Aaron Kirchfeld, Eyk Henning and Dinesh Nair