With the imminent completion of Praxair and Linde’s mega-merger of equals, a raft of change is expected to unfold both within the newly combined entity, Linde plc, and in the global industrial gases business itself.
The deal creates comfortably the biggest industrial gas player in the world, while also shifting the landscape of the North American market in the process.
After taking into account the required divestitures, gasworld estimates that Linde plc will command a share of just under 28% of the market; this will give the company five percentage points more than fellow Tier One player, Air Liquide which had previously been the leader in the region following its 2015/16 acquisition of Airgas.
A new player also emerges – or rather returns – in the US, the biggest of the regional industrial gas markets and valued at just over $21bn in 2017 by gasworld Business Intelligence, in the shape of the Messer Group.
Messer Industries, the joint venture operation between Messer Group GmbH and CVC Capital Partners, takes over the business units of Linde in America and also acquires the subsidiaries added to it from the Messer Group in Western Europe. Based on the negotiated value of the Messer Western Europe contribution assets, Messer and CVC will own 58% and 42% of the group, respectively.
Meanwhile, a sequence of smaller scale M&A could also be expected to unfold across the markets as they not only come to terms with a newly forged playing field, but also actively shape it.
Changing of the guard
Not only is there to be a changing face of the market itself, there will also be a changing of the guard amongst the management of some of the companies involved.
As we have long known, Praxair Chairman and CEO Steve Angel (pictured above) becomes CEO of the new holding company Linde plc, with Professor Dr. Wolfgang Reitzle (current Chairman of the Supervisory Board of Linde AG), taking on the role of Chairman of the new company’s Board.
Now we have confirmation that the leadership team of the combined group will consist of the following six executives who reflect the strengths and capabilities of both Linde AG and Praxair.
From Linde AG:
Christian Bruch, Head of Engineering
Bernd Eulitz, Head of Americas Gases
Sanjiv Lamba, Head of APAC Gases
Eduardo Menezes, Head of EMEA Gases
Anne Roby, Head of Global Functions
Matt White, Chief Financial Officer
For Messer, the group had already revealed in September that it would be the subject of management changes as, at his own request, Dr. Hans-Gerd Wienands, the company’s Chief Financial Officer (CFO) since 2004 left his position (effective 30th September 2018) to join the Advisory Board at the newly formed Messer Industries.
Dr. Uwe Bechtolf, who has been with the company since 1995 and is responsible for controlling and accounting at Messer Group since 2004, will follow in Dr. Wienands’ footsteps and take over the management of Messer’s financial affairs and the areas of legal, insurance and taxes. Ernst Bode, who has been with the company since 1988 and in charge of Messer’s activities in Serbia since 2005, will round out Messer Group’s Management Board as its Chief Operating Officer (COO).
Regarding the leadership team for Messer Industries in the Americas region, gasworld understands that Jens Luehring – President & CFO of the Gases Division for Linde Americas since 2017 – will take on the role of CEO Americas, Messer Industries.
Gareth Parkin – Head of Finance & Control (N. America) at Linde Americas since 2016 – will become CFO Americas for Messer Industries and Jan Desmeth – Vice-President Western Europe for the Messer Group since 2017 – will step up to the role of CEO Europe (Messer Industries).
Can Toygar will become Director of Messer Industries representing the CVC side, having been Director of CVC Capital Partners since 2011.
Other roles at Messer Industries will include Raymond Carr as Sr. VP – Chief Operations Officer and Chris Ebeling as Sr. VP – Sales & Marketing US Bulk.
Return to retirement?
And what of Professor Dr. Aldo Belloni, the returning CEO of Linde AG who had been coaxed back out of retirement to get this merger back on track in December 2016?
Initial talks between Praxair and Linde had broken down in the September, almost as soon as they had started. Despite the strategic rationale principally confirmed, talks were terminated amidst a lack of ‘mutual understanding’. This was swiftly followed by the announcement of two executive departures at Linde; Chief Financial Officer Georg Denoke left his post with immediate effect and CEO Dr. Wolfgang Büchele revealed he would not be available for a second term in the role post-April 2017.
By December 2016, both parties confirmed talks over a merger were to resume. With it came the news that Dr. Büchele had offered to expedite his departure from the role, effective that day (7th December).
Having accepted Dr. Büchele’s request, Linde moved swiftly to appoint Prof. Dr. Belloni to succeed him as CEO, returning to the role he so notably held from 2000 to 2014. “No one knows better than Aldo Belloni how crucial scale and competitiveness are for long-term success in our industry,” the company said.
Having heard nothing further to the contrary, gasworld understands Prof. Dr. Belloni is due to return to retirement shortly after the merger completes. He officially took up office again on 8th December and a then Linde statement explained his term would be ‘through to the end of 2018’.