Praxair, Inc. and The Linde Group aim to conclude negotiations on their prospective $65bn merger of equals by early May.
The two companies announced agreement on a non-binding term sheet governing the essential terms of a merger of equals between the two companies in December.
The term sheet provides for a combination of the group’s business under a publicly traded new holding company bearing Linde’s name.
Both parties have consistently cautioned there is no assurance that a binding definitive agreement on the combination will be reached, or that a transaction will be consummated.
Both have also been keen, however, to stress their expectation to ‘execute a definitive Business Combination Agreement as soon as practicable’.
The timeline for that resolution could now be as soon as the end of April, with various Form 425 filings with the US Securities and Exchange Commission (SEC) in recent weeks appearing to give momentum to an early Q2 conclusion.
Linde confirmed this intent in today’s full year 2016 financials release, stating that preparations for the proposed merger of equals with Praxair are ‘on schedule’ and the aforementioned business combination agreement is endeavoured to be finalised by the end of April or beginning of May 2017.
gasworld understands the company is striving to be in a position to reflect on the conclusion of the agreement by the time of its AGM on 10th May.
The proposed merger would bring together two leading companies in the global industrial gas industry, leveraging the proven strengths of each. The transaction would unite Linde’s long-held leadership in technology with Praxair’s efficient operating model, creating a global leader.
Based on 2015 reported results, it would create a company with pro forma revenues of approximately $30bn (€28bn), prior to any divestitures, and a current market value in excess of $65bn (€61bn). gasworld Business Intelligence previously projected a combined global market share of 33%, pre-divestment.
The transaction is also expected to create considerable value, resulting in approximately $1bn (€0.9bn) in annual synergies, driven by scale benefits, cost savings and efficiency improvements.
In addition to the signing of a legally binding agreement, the merger must also satisfy regulatory bodies and secure approvals, with significant divestment of assets anticipated, as well as all tax and legal due diligence requirements.