Linde and Praxair merger to create $30 bn industrial gases behemoth

The US-based industrial gases major Praxair and the Linde Group, the German gases and engineering company, have agreed to combine in a merger of equals under a new holding company through an all-stock transaction. The companies have signed a non-binding term sheet and expect to execute a definitive Business Combination Agreement as soon as practicable. Based on 2015 reported results, the combination would create a company with pro forma revenues of approximately $ 30 billion (€ 28 billion), prior to any divestitures, and a current market value in excess of $65 billion (€ 61 billion).

The proposed merger would bring together two leading companies in the global industrial gas industry, leveraging the proven strengths of each. The transaction would unite Linde’s long-held leadership in technology with Praxair’s efficient operating model, creating a global leader. The combined company would enjoy strong positions in all key geographies and end markets and create a more diverse and balanced global portfolio. Additionally, it would enable the development and delivery of more innovative products and services to customers.

“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. 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,” said Steve Angel, chairman and CEO, Praxair.

Dr Aldo Belloni, CEO of Linde, commented, “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.”

The combined company would be governed by a single board of directors with equal representation from Linde and Praxair. Dr Wolfgang Reitzle, Linde’s supervisory board chairman, will become chairman of the new company, while Praxair’s chairman and CEO Steve Angel will assume the role of CEO and a member of the board of directors.

The combined company would adopt the globally-recognised Linde name.

Under the proposed terms of the transaction, Linde shareholders would receive 1.540 shares in the new holding company for each Linde share exchanged in the German offer, and Praxair shareholders would receive one share in the new holding company for each Praxair share. As a result, current Linde and Praxair shareholders would each own approximately 50 percent of the combined company.

In the 2015 financial year, The Linde Group generated revenue of € 18 billion, making it one of the leading gases and engineering companies in the world, with approximately 65,000 employees working in more than 100 countries worldwide. 

On the other hand, with sales of $ 11 billion in 2015, Praxair Inc is one of the leading industrial gas companies in worldwide. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings.