The expression ‘what goes around, comes around’ springs to mind with the merger of Praxair, Inc. and The Linde Group, sharing roots that date back to World War I as they so notably do.

Now, these two heavyweights in industrial gases and equipment are coming together in a mega-merger of equals that will change the face of the industry, globally. Here, we take a look at their journey’s since Praxair’s formation in 1992.

Praxair – then and now

As above, Praxair, Inc. became a formally independent company in 1992, a brand derived from the Greek term ‘praxis’ (practical innovation) and the company’s fundamental raw material — air.

Under the leadership of then chairman and CEO H. William Lichtenberger, the newly founded Praxair made great progress in its ability to better serve its customers while improving its profitability, and engaged in vigorous M&A activity along the way. This included the significant acquisition of Liquid Carbonic, then the largest carbon dioxide (CO2) producer worldwide.

Praxair Bulk Delivery, United States

Source: Praxair

The company has come an even longer way since then. Notable acquisitions thereafter included Wilson Oxygen in 1996, Parry Corp. also in 1996, GasTech in 1998, and Whitmore Oxygen in 1998.

Praxair essentially went head-to-head with Linde in 1999 when the two really became serious competitors, with Praxair opening merger talks with BOC, talks that quickly failed, and subsequently Sweden-based AGA. Worried that it would be left behind in the growing global gases business, Linde itself made a cash offer for AGA to counter the merger with Praxair and came out top. In 2000, the deal was completed.

Dennis H. Reilley picked up the baton of president and CEO from the retiring Lichtenberger in 2000 and continued its path of progression, seeing sales rise from $4.6bn in 1999 to $9.4bn in 2007 when he was succeeded by Praxair’s Chairman, President, and CEO today, Stephen (Steve) F. Angel. With 26,000 employees in more than 50 countries, now $11bn in annual sales and a market capitalisation of around $40bn, Praxair has continued this path of progression and performance under Angel.

Linde

Source: Linde

Linde – then and now

As the 1990s began, Linde was in a period of expansion and transition to a technology company spanning gases and engineering. The company had a somewhat limited presence in the US market in 1992, but had actively sought to address this and expanded in the area of technical gases in 1996 with the acquisition of Sunox through its Atlanta-based subsidiary, Holox.

Linde would also go on to enter the hydrogen and carbon monoxide business through a cooperative agreement with Millenium Petrochemicals and would expand further in the US in 1999 through its acquisition of the medical oxygen business that became known as LifeGas.

Linde would be allowed to buy back the long-lost licence to use the Linde name in the US in 1998 and was vigorously expanding in a number of regions. As described above, Linde completed the acquisition of AGA in 2000 which propelled the group to the fourth-largest player globally and firmed up its presence in the US.

At the same time, the BOC Group had been consolidating its position as one of the largest industrial gas companies in the world, and soon became the subject of Linde’s attention. In January 2006, Linde AG confirmed its interest in acquiring BOC and by the September, the acquisition was completed. In November, Linde’s material handling division was sold as a necessary step in economics and re-focusing.

Linde and BOC complemented one another in geographical activities and product portfolio, the result of which was a global player with a leading position in all markets and regions. The group continued to grow and grow in the decades that followed, though its leadership position would be supplanted by Air Liquide in 2016 following its $13.4bn acquisition of Airgas, Inc. Within just a few months of that deal’s completion, merger talks between Linde and Praxair first began.

Messer towers

Source: Messer

Messer – then and now

And where was the Messer Group in 1992, one of the lead player’s in the playground of this mega-merger and its successful negotiation through the US antitrust authorities?

A family-owned business since its inception in 1898, around the time of Praxair’s formation in 1992, the Messer Group was about to move into the management of those outside the family for the first time in its history (1993).

The company has been growing steadily in both Europe and North America up until this point, but was about to embark upon a somewhat risky expansion programme. After the near-collapse of the company, it returned to family ownership with the founder’s grandson, Stefan Messer, appointed CEO in 1998. Together with financial investors, he put the company back on its feet over a period of three years and in 2001 Hoechst AG (now Aventis) confirmed its divestment from the company with the sale of its shares in Messer to Goldman Sachs (Private Equity Funds) and Allianz Capital partners. The new board set about re-structuring and divesting some of Messer’s global interests acquired in the mid to late 1990s and improving the profitability of the company.

Stefan messer

Source: Messer

Its status as a family-owned business was restored in 2004, marking the birth of today’s Messer Group GmbH. Steady but assured growth in core regions had ensued in the more than decade since, with the merger of Praxair and Linde now presenting the opportunity for the Messer Group to significantly grow its footprint again in this, it’s 120th anniversary year. In a $3.3bn acquisition, Messer – in consortium with CVC Capital Partners – is to take over substantially all of Linde’s US bulk business as well as its business in Brazil, Canada and Colombia.

Messer will be gaining a huge footprint in each of the geographies to be acquired, with gasworld Business Intelligence estimating Linde to have a market share of 12% in Brazil in 2016, 41% in Colombia (2016), and just under 20% in Canada (2016). In the US, it occupied a more than 15% market share in 2016.

TNSC Image 1

Source: TNSC

TNSC – then and now

Likewise, what of TNSC (Taiyo Nippon Sanso), another of the key movers in the Praxair-Linde divestment process?

The company in its current incarnation didn’t exist back in 1992. At that time, MATHESON (a subsidiary of Japan’s Nippon Sanso) acquired Texas-based Tri-Gas, forming Matheson Tri-Gas. As part of the intertwined history of all of these players, when Messer underwent its restructuring in the early 2000s, Air Liquide bought up Messer’s US assets (2004) but was required to divest six ASUs and related assets in the US – which Matheson Tri-Gas promptly picked up.

This would mark the beginning of a period of rapid growth for Matheson Tri-Gas, much of the impetus for which came from the merger of Matheson’s Japanese parent Nippon Sanso with Taiyo Toyo Sanso (also 2004). Taiyo Nippon Sanso Corporation (TNSC) was born and had its sights set on becoming a global leader in the industrial gas industry. With TNSC’s support, MATHESON would go on to acquire Linweld (2006), Polar Cryogenics (2007), Five Star Gas and Gear (2008), AERIS (2008), Advanced Gas Technologies (2008), ETOX and Valley National Gases (both 2009), Western International Gas & Cylinders (2010), Continental Carbonic (2014) and Sims Welding (2015).

TNSC became the subject of acquisition itself in 2014, when Mitsubishi Chemical Holdings Corp. secured a near-$1bn majority stake in the group and bolstered both its position and ambitions at the Tier One table of the gases industry.

The company has agreed the €5bn acquisition of the majority of Praxair’s businesses in Europe as a result of the merger, including Praxair’s industrial gases businesses in Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and the UK. The businesses generated annual sales of approximately €1.3bn in 2017 and their sale was key to the merger securing approval in Europe. The deal will see TNSC take a huge step forward in its global expansion plans and seize ‘a unique opportunity to enter the European market’.

Key protagonists

What of this mega-merger’s key protagonists or public faces – Steve Angel, Prof. Dr. Aldo Belloni, and Prof. Wolfgang Reitzle – back in 1992?

A native of Winston-Salem, North Carolina, Angel received a bachelor of science degree in civil engineering from North Carolina State University and an MBA from Loyola College in Baltimore. Around the time of Praxair’s formation in 1992, he would have been putting those skills to good use in employment with General Electric (GE), having spent 22 years in a variety of management positions with General Electric prior to joining Praxair in 2001.

Angel joined Praxair as an executive vice-president and was later named president and chief operating officer (COO) in February 2006. He became President and CEO in January 2007 and Chairman in April 2007, and has driven the Praxair side of its merger with Linde AG since talks first began in summer 2016.

Angel will become CEO of the new holding company, Linde plc.

Wolfgang Reitzle, Linde 2017

Source: Linde AG

Professor Reitzle (pictured) was still working in the automotive sector back in 1992, with BMW. Between 1999 and May 2002, Reitzle was the head of Ford’s Premier Automotive Group, overseeing the Volvo, Jaguar, and Land Rover marques. From here, his story with The Linde Group began, joining the board in 2002 and becoming chairman in 2003 – a position he held through to May 2014 and which saw him work closely with Prof. Dr. Aldo Belloni in the acquisition of the BOC Group in 2006 and reshaping of the new Linde Group.

Having resigned in May 2014 due to corporate governance rules in Germany, Prof. Reitzle returned to the role of Chairman of the Supervisory Board in May 2016, on the eve of merger talks with Praxair first beginning.

Prof. Reitzle will become Chairman of the new company’s Board.

Prof. dr. aldo belloni, chief executive office, linde group

Source: Linde AG

Professor Dr. Belloni was president of New York-based engineering services company Lotepro Corp. back in 1992. Though he had actually spent time within the engineering division of Linde back in 1980, he came to prominence at the company in 1994 when he became a Member of Executive Management, Linde Engineering Division.

Prof. Dr. Belloni was Member of the Executive Board between 2000 and 2014 and instrumental in the group’s acquisition of the BOC Group back in 2006. Having retired in 2014, he was coaxed back out of retirement in December 2016 to return to the role of CEO of Linde AG and oversee its planned mega-merger with Praxair, Inc.