Linde, Praxair renew merger talks
30 Nov 2016
German industrial gases group Linde AG has received a fresh approach from US rival Praxair for a proposed merger of equals, two months after earlier talks failed.
''Linde has received a revised proposal from the U.S. based company Praxair, Inc. concerning a potential merger of equals. The Executive Board of Linde is reviewing the proposal,'' the Munich-based company said in a statement.
The two companies ended merger talks in September, and Linde had then said that ''While the strategic rationale of a merger has been principally confirmed, discussions about details, specifically about governance aspects, did not result in a mutual understanding.'' (See: German industrial-gas giant Linde ends merger talks with US rival Praxair)
Several media reports had then suggested that both companies had agreed to broad terms of the deal like having the headquarters for the combined entity in Europe, and the operational centre in Praxair's hometown in Connecticut.
But Linde wanted to have certain operations to be based at its Munich headquarters since it feared that certain key management jobs would be lost.
Founded in 1879 by Professor Doctor Carl von Linde, Linde became the world's largest industrial gas company by market share as well as revenue after it acquired its UK-based rival the BOC Group in 2006 for $13.9 billion.
Linde also designs and builds large-scale chemical plants for the production of industrial gases, including oxygen, nitrogen, argon, hydrogen and carbon monoxide, as well as large plants for processing LPG and the manufacture of olefins.
The company, which is listed on all the German stock exchanges and also in Zürich, has over 600 affiliated companies in more than 100 countries, with customers in the industrial, retail, trade, science, research and public sectors and has a market cap of $30 billion.
It holds 22 per cent of the world's market share in industrial gases followed by Air Liquide with 21 per cent, Praxair with 13 per cent, Air Products & Chemicals with 10 per cent, Taiyo Nippon Sanso Corporation with 4 per cent, and Messer Group with 1 per cent.
Praxair is the largest industrial gases company in North and South America, and the third-largest worldwide by revenue. It posted 2015 revenue of $10.8 billion and has a market cap of $33.8 billion.
It was the first company in North America to commercialise separated oxygen, and the first to introduce the distribution system for liquid gas in 1917.
A merger could create the world's largest industrial-gas producer with combined market cap of $63.98 billion and annual revenues of more than $30 billion.
But a merger between the two giants would attract scrutiny from regulators in North America and the European Union.
