Linde AG
5. Linde AG

Linde, Praxair Deal Pushed to Brink by Antitrust Demands

Aug. 22, 2018
Linde said getting a merger past U.S. antitrust authorities will require the industrial-gas giants to sell more assets than planned.

Linde AG acknowledged that getting a merger with Praxair Inc. past U.S. antitrust authorities will require the industrial-gas giants to sell more assets than planned, potentially putting the $45 billion deal in jeopardy.

The latest feedback from the Federal Trade Commission would require the pair to breach a self-imposed threshold for disposals, Munich-based Linde said Wednesday. The regulator has focused attention on a plant in La Porte, Texas, according to people with knowledge of the matter.

The FTC this month indicated that the companies would need to offload more assets even after they identified about $9 billion of disposals in Europe and North America. The initial plan set a limit on divestments of 3.7 billion euros (US$4.3 billion) in revenue, and Linde said talks with Praxair on how to work around that red line remain constructive.

“While surpassing the threshold does not necessarily mean that the merger will fail, it certainly makes life more difficult for management,” said Heiko Feber, an analyst at Bankhaus Lampe.

Shares of Linde, which supplies oxygen to hospitals and steel plants and nitrogen for food packaging and electronics, fell as much as 2.3% and were trading 1.7% lower at 189.7 euros as of 3:13 p.m. in Frankfurt.

The Texan plant of concern to the FTC makes hydrogen, carbon monoxide and syngas -- a mix of both -- for LyondellBasell Industries NV’s nearby site, said the people, who asked not to be named because the information isn’t public.

Linde and Praxair are working on a solution for the profitable facility, which could go to LyondellBasell or other players with similar operations, aiming to wrapping up regulatory sign-off by the end of September, the sources said.

European Union regulators approved the combination of Linde and Danbury, Connecticut-based Praxair this week after German regulators set an Oct. 24 deadline for all approvals to be secured.

Linde has already agreed to sell a $3.3 billion package of North American assets -- including its U.S. bulk business -- to CVC Capital Partners and Messer Group GmbH, while Japanese rival Taiyo Nippon Sanso Corp. will acquire Praxair’s entire European operation for almost $6 billion.

Under the terms of the merger agreement, any changes would need to be accepted by both sides, Linde said.

By Andrew Noël and Eyk Henning

Popular Sponsored Recommendations

Food and Beverage 2024 Trends and Outlook for North America

Oct. 29, 2023
Ready to hear what 200 of your peers said are the top challenges and opportunities in 2024? Don’t fall behind. Uncover actionable insights to better prepare for 2024 in this whitepaper...

Managing Supply Chain Risk in Aerospace and Defense!

Dec. 6, 2023
A&D companies need to adopt digital technologies that enable greater collaboration, active monitoring of leading risk indicators, & integration of supply chain risk factors into...

Process Mining For Dummies

Nov. 19, 2023
Here it is. Everything you need to know about process mining in a single book, written in the easy-to-understand, hard-to-forget style that ‘For Dummies’ manages so effortlessly...

Decarbonization Navigator: A Toolkit for Organizations

Sept. 28, 2023
The increasing urgency of addressing climate change along with stakeholder pressures are driving the need for organizations to prioritize decarbonization. Discover how to start...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!