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Linde-Praxair Merger After All: Linde and Praxair Agree on Merger Conditions

Editor: Gerd Kielburger

The jumbo merger of the gas giants is imminent: After tough negotiations, Linde and the US competitor Praxair have agreed on the conditions of the fusion. The merger will see the creation of a new Number One of global gas companies…

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German gas specialist Linde, one of the oldest supplier of industrial gases, plans to merge with Praxair of the US - the traditional name Linde shall nevertheless be continued.
German gas specialist Linde, one of the oldest supplier of industrial gases, plans to merge with Praxair of the US - the traditional name Linde shall nevertheless be continued.
(Source: Linde)

Munich, Germany – Linde and Praxair could join hands soon: According to reports, the two companies have reached an agreement on a merger. The gas giants boast a joint turnover of 28 billion Euro – which places them clearly ahead of the strongest competitor, the French Air Liquide, which achieved a turnover of 21.2 billion Euro after the acquisition of Airgas.

Fusions, mergers, hostile takeovers: Let us examine the M&A happening of 2016 in detail:

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According to market experts, there are a lot of plus points from the corporate perspective: In addition to the fact that the merger will help them achieve the Numero Uno position among the gas groups, the portfolios of the merging companies supplement each other rather well. Praxair registered a profit of 1.5 billion Euro - a remarkable achievement (Linde: 1.15 billion at nearly double the turnover). The industrial gas business of the Americans in particular is extremely profitable.

On the other hand, Linde is well established in Europe and Asia and has a strong plant manufacturing and medical gas division. A part of this knowledge could be sacrificed on account of the merger: Experts presume that Linde will continue to manage the plant manufacturing division Linde Engineering on its own in the medium term.

Merger of Equals? The Conditions of the Deal

Last Tuesday the status was as follows: The two companies have reached an agreement on the basic points of a merger. The new group will function under the name Linde and will probably have its head office in Switzerland, or at least somewhere in Europe. Important functions will however remain in Munich, the head office of Linde since 2008.

The new group is expected to be managed by Praxair Chief Steve Angel, who will retain his head office in the US as the future CEO. The existing Linde Board of Directors Chairman Wolfgang Reitzle will hold this post for the new holding company too. The remaining management will consist equitably of members of the existing partner boards.

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