The European Commission has finally approved the Â£8.2bn acquisition by Linde of the UK\\$quot;s BOC Group.
The initial market investigation found that the proposed acquisition could have created significant competition problems by removing an important competitor of Linde on a number of gas markets.
The activities of Linde and BOC overlap on the markets for industrial and specialty gases in Poland and the UK. The transaction would create a dominant player in various Polish gas markets and would strengthen BOC's dominant position in the UK markets.
These competition concerns are now removed by the remedy package offered by the parties, which includes the divestiture of Linde\\$quot;s industrial gases business in the UK, BOC\\$quot;s industrial and specialty gases business in Poland and contracts with Linde's ethylene oxide customers in the UK and Ireland. The divestitures correspond to a sales volume of approximately â‚¬160m.
In addition, Linde committed to transfer certain contracts with helium suppliers and to sever, to an extent agreed with the commission, joint ventures between BOC and Air Liquide in the Asia/Pacific region, either by selling BOC's shareholding or by acquiring Air Liquide's shareholding.
In the light of these commitments, the Commission has concluded that the proposed operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it. Competition Commissioner Neelie Kroes said: 'In view of the remedies offered, we are satisfied that the modified merger would not harm consumers.'
'The approval from the European Commission is a key step towards a merger with BOC,' confirmed Prof. Wolfgang Reitzle, President and CEO of Linde AG. 'We expect the transaction to be closed in the course of the third quarter of 2006. The extent of the Commission's conditions is in line with our expectations and we will comply promptly with these conditions.'
The US Federal Trade Commission's investigation is well advanced. Linde believes that a positive decision will be issued within the next several weeks and is confident to be able to close the transaction according to plan in the third quarter of 2006.