After All: Linde and Praxair Agree on Merger Conditions

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Only last week Linde removed Chief Financial Officer Georg Denoke and Chairman Wolfgang Büchele to - as is being said - guarantee continuity of the existing negotiations with Parxair. Bücheles successor will be the long-standing Linde board member Dr. Aldo Belloni (66), who is expected to return to the company for the transition period.

Sources in Munich revealed that the existing shareholders of the two companies will get 50 % shares each in the new gas conglomerate. Linde shareholders will get 1.54 shares and Praxair shareholders will get one share per share. The possible synergies of the merger are estimated to be one billion dollar per annum.

Additional Information

These are the Top-3 Players of the Industrial Gas Sector:

1. Air Liquide: After the acquisition of Airgas (USA), the French company achieved a turnover of € 21.2 billion at a profit of € 1.8 billion.

2. Linde: The traditional German manufacturer with head office in Munich earns a profit of € 1.15 million with 65,000 employees (Turnover: € 18 billion).

3. Praxair: The US gas specialist is considered to be the cash cow among the industrial gas suppliers. With only 26,000 employees, the American company earns a profit of € 1.5 billion (Turnover: € 10 billion). Company head office is in Danbury, Connecticut.

Marriage Made in Heaven or Pre-Programmed Problems?

Even Praxair had to make concessions in the preliminary rounds: Thus, for instance, already concluded sections at Lined were rejected and terminations for operational reasons were ruled out till 2021. The location of Dresden will be retained, according to group circles. The € 300 million savings programme will however be continued.

Gallery

Whether the mega gas merger will actually take place will now be decided by the cartel authorities. If they give the green signal, a new incumbent may be born in the industrial gas and gas technology sector. At least the German workers are still sceptical about the future corporate structure and alignment. Works Committee Head Katte spoke in this connection of “the potential of considerable tension”.“The strategic combination between Linde and Praxair would leverage the complementary strengths of each across a larger global footprint and create a more resilient portfolio with increased exposure to long-term macro growth trends," said Steve Angel, Praxair’s Chairman and CEO. “We consider this to be a true strategic merger, as it brings together the capabilities, talented people and best-in-class processes of both companies, creating a unique and compelling opportunity for all of our stakeholders.“

“Under the Linde brand, we want to combine our companies’ business and technology capabilities and form a global industrial gas leader. Beyond the strategic fit, the compelling, value-creating combination would achieve a robust balance sheet and cash flow and generate financial flexibility to invest in our future,” said Professor Dr Aldo Belloni, CEO of Linde.

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Linde-Praxair Merger

After All: Linde and Praxair Agree on Merger Conditions

Marriage Made in Heaven or Pre-Programmed Problems?