News & Features

Linde Reaches Merger Deal with Rival Praxair

21 Dec 2016

LONDON — Linde of Germany said on Tuesday that it had reached an agreement on a potential “merger of equals” with Praxair, an American rival, in a deal that would bring together two of the world’s largest suppliers of industrial-gas products.

The nonbinding agreement came less than two weeks after Linde said it would resume talks with Praxair. Linde had called off discussions in September.

Merging the companies would create a giant with more than $30 billion in annual revenue and a market capitalization of more than $60 billion.

The combined company would operate under the Linde name, and its board of directors would be split evenly between representatives from the two companies, Linde said.

The next steps for the merger include the boards of both companies reaching a legally binding agreement and approval from regulators. Shareholders controlling at least 75 percent of Linde’s stock would also have to agree for the deal to proceed.

Under the terms of the transaction, investors would receive 1.54 shares in the new company for each Linde share they hold. Praxair shareholders would receive one share in the new company for each Praxair share.

Steve Angel, the Praxair chief executive, would serve as chief executive of the combined company; Wolfgang Reitzle, the Linde chairman, would be chairman.

The new company would have stock listings in New York and in Frankfurt and would be domiciled in Europe. Corporate functions would be split between Danbury, Conn., where Praxair is based, and Munich, where Linde is based.

Linde said that the transaction was expected to save about $1 billion a year.

The German company called off merger talks in September, saying that shareholder representatives on its supervisory board, along with its chief executive, had recommended that it terminate discussions.

The day after the talks collapsed, Linde said that its chief financial officer, Georg Denoke, would step down immediately and that its chief executive, Wolfgang Büchele, would leave next year in a management shake-up.

This month, Linde said that Aldo Belloni would take over as chief executive and that it would resume talks with Praxair.

Praxair’s main products include oxygen, carbon dioxide and helium. It also manufactures equipment to produce other gases used in industry. The company generated $10.8 billion in sales in 2015 and has about 26,000 employees in more than 50 countries.

Linde has three divisions focused on industrial gases, engineering and supply chain services. Its gas division concentrates on industrial and medical gases, including oxygen, nitrogen and argon.

The company generated 17.9 billion euros, or about $18.7 billion, in revenue in 2015 and has about 64,000 employees in more than 100 countries.

Source:  The New York Times, 20 Dec. 2016