New Challenges for Linde and Praxair Merger

  • Author:
  • Published: 06 August 2018
  • Copyright: Wiley-VCH Verlag GmbH & Co. KGaA
  • Source / Publisher: Linde AG
  • Associated Suppliers: Linde plc, Dublin, Ireland
thumbnail image: New Challenges for Linde and Praxair Merger

Merger clearances of the business combination of Linde and Praxair could require the sale of other parts of the company. Linde was informed that the U.S. Federal Trade Commission ("FTC") expressed expectations with regards to further divestiture commitments and prospective purchasers which are considered required for a merger clearance. In addition to the FTC, authorities in Europe, China, India, and South Korea have yet to approve the deal. Higher hurdles in the US could lead to more demanding conditions for other countries.

Linde and Praxair had already initiated large-scale sales of business to address competition concerns. Linde and Praxair earlier announced that they would back down from the merger in case they would have to divest parts with a total of more than € 3.7 billion in revenue or € 1.1 billion in operating profit (Ebitda). A second and probably bigger challenge might be that the merger must be wrapped up until 24 October according to German tax law.

Linde and Praxair are analyzing the expectations to assess their scope and to evaluate how they could be implemented to achieve a timely clearance of the business combination. The discussions with the FTC about the divestiture commitments will be continued to achieve a mutually acceptable result.

The merger of Linde with its US competitor Praxair to become the world's largest manufacturer of industrial gases such as oxygen and helium.

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