DANBURY, Conn. – Officials with Praxair Inc. and Munich, Germany-based Linde AG announced on Dec. 20 the industrial gas businesses plan to combine companies as part of a proposed “merger of equals” in an all-stock transaction. According to a statement from Praxair, the merger would combine its operational excellence with Linde’s reputation for technology leadership, creating a diverse and balanced portfolio in key geographies. The 50-50 partnership would reportedly represent a market value of approximately $67 billion with $1 billion in synergies annually.
“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.”
The plan would include forming a new holding company (“Newholdco”), under which Linde shareholders would receive 1.54 shares for each Linde share while Praxair shareholders would receive a one-for-one share in the new holding company. Shareholders would each own approximately 50 percent of the holding firm and the combined company would adopt the Linde name and be listed on the New York Stock Exchange and the Frankfurt Stock Exchange.
“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 Aldo Belloni, Ph.D., CEO of Linde.
A single board of directors, led by Linde’s Wolfgang Reitzle Ph.D., would govern the combined company and Praxair Chairman and CEO, Steve Angel would be appointed CEO of the new company in addition to serving on the board.
Finalizing the transaction is subject to shareholder and regulatory and customary approvals.
According to the statement from Praxair; “Linde and Praxair are confident that any required regulatory approvals, including any required divestitures, could be obtained in a timely manner following the execution of a definitive business combination agreement.”