Linde, Praxair to Merge

Industrial gas giants Linde AG and Praxair Inc. have agreed to merge operations.

The proposed deal, which is expected to close in the second half of 2018, would create the world's largest industrial gas group with a combined market value of about $70 billion. The partners aim to increase their valuation to $100 billion within five years of completing the merger.

Both companies supply gases such as helium and pure oxygen used in a variety of industrial and transportation applications. Praxair was the U.S. subsidiary of Linde until it was sold to Union Carbide and subsequently spun off as a separate company in 1992.

Last year Munich, Germany-based Linde posted sales of €17 billion ($19.1 billion), and Danbury, Conn.-based Praxair had sales of $11 billion (€9.8 billion). The merged operations are expected to create about $1.2 billion (€1.1 billion) in annual synergies and cost-reduction programs within three years of the closing through economies of scale and other efficiencies. The companies also expect to benefit from having a more balanced global customer base.

Under the all-stock transaction, current Linde shareholders will be offered 1.5 shares in the new holding company for each Linde share. Praxair shareholders will be compensated on a one-to-one basis.

Linde’s supervisory board chairman, Wolfgang Reitzle, will become chairman of the new holding company’s board. Praxair’s chairman and CEO, Steve Angel, will serve as CEO of the new group.