The Linde Group has confirmed it is re-engaging with Praxair, Inc. in talks over a potential merger of equals between the two companies.
Praxair announced last week that it had moved to revive talks which broke down in September over a lack of ‘mutual understanding’.
Linde initially confirmed the proposal, but has today affirmed its intent to engage in those discussions. All members of the Supervisory Board support resuming the talks, the company said in a statement.
In a move which is sure to fire a flurry of speculation and conjecture, Linde also announced the immediate departure of CEO Dr. Wolfgang Büchele, who had revealed his pending exit shortly after the breakdown in original merger talks.
Büchele will be succeeded by the returning Professor Dr. Aldo Belloni.
News of preliminary discussions between Praxair and Linde broke in August this year, creating a flurry of speculation.
The ink had barely dried on another game-changing acquisition in the industry; talks came just weeks after fellow Tier One player Air Liquide had itself closed the $13.4bn acquisition of Airgas, Inc.
Talks broke down in September, however, 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, with Chief Financial Officer Georg Denoke leaving his post with immediate effect and CEO Dr. Wolfgang Büchele revealing he would not be available for a second term post-April 2017.
With Linde now affirming that talks are to resume, Dr. Büchele has offered to the Supervisory Board that he resigns his mandate, effective from the end of today (Wednesday 7th).
Citing the importance of continuity for the forthcoming negotiations, he said in a statement, “With the resumption of the talks, a successful merger is now drawing near. I have already set a course for my own future and with this step I am acting in the best interest of the company.”
“On behalf of the Supervisory Board, but also on my own personal behalf, I would like to thank Wolfgang Büchele for everything he has contributed to our company and for his trusting working partnership”
Professor Dr. Wolfgang Reitzle
“With a succession plan in place, the necessary continuity is assured without interruption for the demanding tasks of the coming months. I am very pleased that, with the resumption of the merger talks, Linde’s leading global role is close at hand.”
Having accepted Dr. Büchele’s request, the Executive Supervisory Board moved swiftly to appoint Prof. Dr. Belloni to succeed him as CEO, returning to the role he so notably held from 2000 to 2014.
Prof. Dr. Belloni will take up office on 8th December, through to the end of 2018.
Professor Dr. Wolfgang Reitzle, Chairman of the Supervisory Board of Linde AG, who had himself returned to the Linde executive fold earlier this year after two years away, said of the succession, “On behalf of the Supervisory Board, but also on my own personal behalf, I would like to thank Wolfgang Büchele for everything he has contributed to our company and for his trusting working partnership.”
“Wolfgang Büchele took on the role of CEO in economically and structurally challenging times. We are therefore all the more thankful for his introduction of initiatives to secure and extend Linde’s leading role in the global marketplace.”
He continued, “I am very pleased that Aldo Belloni is taking on the leadership of our company at a time when we are redefining our future as a global player. No one knows better than Aldo Belloni how crucial scale and competitiveness are for long-term success in our industry.”
“He has 34 years of experience at Linde, 14 of which on the Linde Executive Board, and we have every confidence that he will apply his great expertise to help shape the next chapter of our company history in our interest.”
Air Liquide’s acquisition of Airgas had already shifted the landscape in the global industrial gases business in 2016, creating a new combined leader in North America and complementing number one positions in Europe, Africa/Middle East and the Asia-Pacific.
Any merger of equals between Praxair and Linde, however, would further shake up the structure of the $80bn global gases business. gasworld Business Intelligence had previously projected a combined global market share of 33%, pre-divestment.