APD Air Products and Chemicals Inc

By Rick Carew 

Shareholders of China's Yingde Gases Group Co. voted Wednesday to remove the company's chairman in a rare Chinese boardroom battle, according to people familiar with the situation, a move that could push forward a sale of the company.

Allentown, Pa.-based Air Products & Chemicals Inc., a maker of industrial gases, is offering up to $1.5 billion in a bid to buy the Hong Kong-listed firm. If its bid is successful, it would mark the largest takeover of a Chinese firm by a U.S. buyer. It faces competition from Hong Kong-based private-equity firm PAG Asia Capital.

Shareholders voted to keep former Chief Executive Sun Zhongguo and former Chief Operating Officer Trevor Strutt on the board, the people said. Deal makers and investors close to the situation say they expect Mr. Sun and Mr. Strutt to move faster to strike a deal to sell Yingde than the company has thus far under the removed chairman Zhao Xiangti's leadership. Morgan Stanley is advising Yingde on the sale process.

The fight over Yingde, which accounts for about 14% of China's industrial-gas market by revenue, presents an unusual opportunity for a U.S. buyer to purchase a big Chinese company. Chinese regulators restrict foreign investment in many sensitive industries and have nixed high-profile bids for local companies in the past, including Coca-Cola Co.'s $2.4 billion attempted takeover of China Huiyuan Juice Group Ltd. in 2009 on antitrust grounds. That has discouraged other U.S. firms from pursing splashy acquisitions.

The biggest U.S. acquisition of a Chinese company was Joy Global Inc.'s $1.4 billion purchase of International Mining Machinery Holdings Ltd. in 2011, according to Dealogic data.

Write to Rick Carew at rick.carew@wsj.com

(END) Dow Jones Newswires

March 08, 2017 08:14 ET (13:14 GMT)

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