Alfa Laval Expands Cryogenic Capabilities with Fives Acquisition

On March 21, 2025, Alfa Laval, a global leader in heat transfer, separation, and fluid handling technologies, announced a significant strategic move: the acquisition of Fives Cryogenics, a world-renowned expert in cryogenic heat transfer and pump technologies. This acquisition, valued at EUR 800 million, is set to bolster Alfa Laval's position in the energy transition and enhance its capabilities in energy efficiency.



The acquisition of Fives Cryogenics aligns perfectly with Alfa Laval's strategic goals of advancing energy efficiency and the energy transition. Cryogenic technologies are pivotal for both traditional gases like LNG and emerging applications such as hydrogen and carbon capture. By integrating Fives Cryogenics' expertise, Alfa Laval aims to expand its portfolio of heat transfer and pump products for gas liquefaction, a critical area in the energy sector.

Tom Erixon, President and CEO of Alfa Laval, highlighted the strategic importance of this acquisition. "By adding cryogenic technologies to the Alfa Laval portfolio, we would expand our capabilities to move energy efficiency and the energy transition forward," he stated. Erixon emphasized the strong potential in the business and the key synergies between Fives Cryogenics' deep technological expertise and Alfa Laval's strong position in the global gas market.

Fives Cryogenics, with over 60 years of experience and manufacturing facilities in France, China, and Switzerland, employs more than 700 people and generated approximately EUR 200 million in revenue in 2024. The company is expected to generate revenue of EUR 200-250 million and be neutral to positive to the Alfa Laval group margin, indicating a financially beneficial addition to the company.

The integration of Fives Cryogenics into Alfa Laval's Energy Division as a new separate business unit will allow it to benefit from Alfa Laval's extensive global reach and technological prowess. Frédéric Sanchez, CEO of the Fives Group, underscored 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.

However, the acquisition is not without its challenges. The transaction is subject to necessary regulatory approvals and is expected to close during 2025. This process could introduce delays or complications that might affect the timeline and success of the acquisition. To mitigate this risk, Alfa Laval has engaged Jefferies as its financial advisor and White & Case as its legal advisor, ensuring that the company has expert guidance throughout the regulatory process.

Another challenge is the integration of the two companies' cultures and operational practices. Fives Cryogenics has a strong position in the world market with manufacturing facilities in France, China, and Switzerland, and employs more than 700 people. Ensuring that these employees and facilities align with Alfa Laval's operational standards and company culture will be crucial. Alfa Laval plans to continue investing in capabilities and growth, especially in the key production facility in Golbey, France, which will help in integrating the new business unit smoothly.

Additionally, there may be potential synergies and key technological expertise that need to be harmonized. Fives Cryogenics' deep technological expertise in cryogenics and Alfa Laval's strong position in the global gas market present opportunities for synergy. However, aligning these technologies and expertise will require careful planning and execution. Alfa Laval's commitment to investing in capabilities and growth, as well as its plan to operate the cryogenic business as a new separate business unit within its Energy Division, will help in mitigating this challenge.

Finally, the financial aspects of the acquisition, including the all-cash transaction funded by existing liquidity and debt financing, pose a risk. The transaction is valued at EUR 800 million on a cash and debt-free basis, and Fives Cryogenics is expected to generate revenue of EUR 200-250 million and be neutral to positive to the Alfa Laval group margin. Ensuring that the financial integration is smooth and that the expected revenue and margin contributions are realized will be critical. Alfa Laval's strong financial position and its commitment to responsible growth will help in mitigating this risk.

In summary, the acquisition of Fives Cryogenics by Alfa Laval represents 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.