Air Products & Chemicals, Inc. (NYSE:APD) is officially Bill Ackman’s next target; the story was first broken by CNBC’s Maneet Ahuja. Ackman told CNBC’s “Squawk Box” early this morning that his fund Pershing Square has taken a 9.8 percent stake in the company. That stake cost Ackman approximately $2.2 billion and marks his largest investment Pershing has ever made.

Bill Ackman air products

Air Products on the rise

Ackman had said earlier this month that he had taken a major stake in a large cap company, and since then, there has been speculation about which company it was. One of the earliest suggestions was FedEx Corporation (NYSE:FDX), but that theory was quickly discounted and replaced by Air Products & Chemicals, Inc. (NYSE:APD).

Shares of the company have been rocketing upward since late last week when the speculation was first made by CNBC. This morning in premarket trading the stock rose as much as 4 percent.

“I was a little too cute in my letter to investors,” Ackman said on Tuesday about his major investment. “I didn’t expect people to be running around looking for the company—I think it alerted the market.”

Air Products adopted poison pill

Speculation about Air Products being Bill Ackman’s next target began after the company announced that it was adopting a poison pill designed to prevent any investor from taking a stake of more than 10 percent in the company. Management said they did it because they detected significant changes in trading volume, and that poison pill did have an effect on Ackman’s investment because it prevented him from buying an even larger share of the company. He said Pershing Square would have bought more shares if the company hadn’t adopted the poison pill.

Ackman has plans for Air Products

Bill Ackman said this morning that he believes Air Products & Chemicals, Inc. (NYSE:APD) is undervalued and that he has some ideas about how to make the company more valuable. He wouldn’t elaborate on those ideas, but CNBC’s Becky Quick explained how a look at what Ackman did at Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) could provide some clues about what he might do at Air Products.

According to CNBC, Ackman took a 14 percent stake in the rail company in 2011 and then suggested bringing in new management. At first he was met by resistance from the board, but then a proxy battle ensued, and he ended up winning most of the board seats. He brought in a new chief executive officer last year, and shares of Canadian Pacific Railway Limited (NYSE:CP) (TSE:CP) have more than doubled since then.

Last month Ackman announced that Pershing Square would sell its stake in Canadian Pacific over the next six to 12 months.