 "Linde, Praxair agree to $65-bn merger plan")
German industrial gases group Linde and US suitor Praxair have agreed on an outline for a $65 billion-plus merger, with the combined company to be run out of the United States by Praxair’s chief executive.
The agreement unveiled on Tuesday, comes after Praxair provided new assurances to Linde over jobs and corporate governance in Germany, sources have said.
As part of the agreement on key aspects of the planned all-share merger, existing Linde and Praxair shareholders would each own about 50 per cent of the combined company.
The merged group will target $1 billion in cost savings, the two companies said in a joint statement, although some analysts said that figure looked overly optimistic.
“The transaction would unite Linde’s long-held leadership in technology with Praxair’s efficient operating model,” the companies said.
Alongside rivals Air Liquide and Air Products and Chemicals, Linde and Praxair are struggling with slower growth in demand from clients in the manufacturing, metals and energy industries.
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That has already led to consolidation in the industrial gases sector with Air Liquide buying Airgas for $13.4 billion.
Linde shareholders will receive 1.54 shares in the merged company for each of their shares, the two groups said. Praxair shareholders will get one share in the new holding company for each Praxair share.
The main terms of the proposal had been flagged by Reuters earlier this month.
The new entity, representing a combined $30 billion in 2015 revenues before antitrust sell-offs, will have a dual listing in New York and Frankfurt.
Praxair’s previous approach for Linde failed in September partly because of disagreements over where to locate key activities and who would run the business.
Reuters