Germany/USA: Industrial Gases Praxair and Linde Sign Business Combination

Linde and Praxair announced that the companies have entered into a definitive business combination agreement (BCA) to come together under a new holding company through an all-stock merger of equals transaction.

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Pullach/Germany — The companies expect the transaction to close in the second half of 2018, subject to customary closing conditions, including regulatory approvals.

The proposed merger brings together two leading companies in the global industrial gas industry.

“This combination is a compelling and transformative opportunity to create a world-class leader in the industrial gas industry,” said Steve Angel, Chairman and CEO of Praxair, Inc. “The combined company will give us the opportunity to leverage the individual strengths of both companies across a much larger global footprint and enhance our ability to drive innovation and growth.”

“This merger is a once-in-a-lifetime opportunity to form a great global industrial gas company poised to deliver value for customers, employees and shareholders alike. The new company is well positioned in all key markets and regions and can build on its exceptional R&D expertise,” said Aldo Belloni, CEO of Linde AG.

Based on 2016 reported results, the combination will create a company with pro forma revenues of approximately $ 29 billion (€ 27 billion), prior to adjustments, potential divestitures and regulatory limitations, and a combined current market value in excess of $ 70 billion (€ 66 billion).

The companies expect $ 1.2 billion (€ 1.1 billion) in annual synergies and cost reduction programs that are expected to be achieved over a period of approximately three years following closing. These synergies and cost reductions are expected to arise from scale benefits, cost savings, and efficiency improvements from existing cost reduction programs.

Governance Structure and Terms of the Transaction

The new company will be governed by a 12-member board of directors with equal representation from Linde and Praxair. Linde´s Supervisory Board Chairman, Wolfgang Reitzle, will become Chairman of the new holding company´s board. Praxair´s Chairman and CEO, Steve Angel, will become CEO of the new group and will also be a board member of the new holding company.

The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the United Kingdom. The group CEO will be based in Danbury, Connecticut, USA and group corporate functions will be appropriately split between Danbury, Connecticut and Munich.

The new group will adopt the globally-recognized and respected Linde name reflecting our shared history and heritage, Praxair claims.

Under the proposed terms of the transaction, Linde shareholders will be offered 1.54 shares in the new holding company for each Linde share, and Praxair shareholders will receive one share in the new holding company for each Praxair share. As a result, current Linde and Praxair shareholders will each own approximately 50 % of the combined company assuming a 100 % share exchange in the exchange offer.

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