Praxair, Inc. and The Linde Group have announced agreement on a non-binding term sheet governing the essential terms of a merger of equals between the two companies.

The term sheet provides for a combination of the group’s business under a publicly traded new holding company bearing Linde’s name.

Though both parties caution there is no assurance that a binding definitive agreement on the combination will be reached or that a transaction will be consummated, Praxair notes in its statement that the two companies ‘expect to execute a definitive Business Combination Agreement as soon as practicable’.

The new holding company will launch a public exchange offer to the shareholders of Linde. The transaction and the public exchange offer is based on a 50:50 valuation ratio of Linde and Praxair, while the new holding company would be listed on both the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange.

Likewise, membership in the board of the combined company will be split 50:50 between Linde and Praxair, with current Praxair Chairman and CEO Steve Angel set to become CEO of the new holding company. Current Chairman of the Supervisory Board of Linde AG, Professor Dr. Wolfgang Reitzle, will become Chairman.

Corporate functions would be appropriately split between Danbury, Connecticut and Munich, Germany to help achieve efficiencies for the combined company.

Praxair-Linde merger: What happens next?

“The strategic combination between Linde and Praxair would leverage the complementary strengths of each across a larger global footprint and create a more resilient portfolio with increased exposure to long-term macro growth trends,” enthused Angel.

“We consider this to be a true strategic merger, as it brings together the capabilities, talented people and best-in-class processes of both companies, creating a unique and compelling opportunity for all of our stakeholders.”


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. in May (2016).

If realised in the New Year, any merger of equals between Praxair and Linde would create another seismic shift in the structure of the global industrial gases business for the second time in as many years.

“We consider this to be a true strategic merger, as it brings together the capabilities, talented people and best-in-class processes of both companies, creating a unique and compelling opportunity for all of our stakeholders”

Steve Angel, Chairman and CEO, Praxair

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. The combined company would enjoy strong positions in all key geographies and end markets, and create a more diverse and balanced global portfolio.

Based on 2015 reported results, the combination would create a company with pro forma revenues of approximately $30bn (€28bn), prior to any divestitures, and a current market value in excess of $65 billion (€61bn).

Praxair-Linde: The reaction

The transaction is expected to create considerable value, resulting in approximately $1bn (€0.9bn) in annual synergies, driven by scale benefits, cost savings and efficiency improvements.

gas world Business Intelligence previously projected a combined global market share of 33%, pre-divestment.

Subject to approvals

The signing of any legally binding agreement is subject to the agreement of both parties with respect to all terms and conditions of any combination, satisfactory results of further regulatory, tax and legal due diligence and the approval of any definitive agreement by both the Board of Directors of Praxair and the Executive Board and the Supervisory Board of Linde.

Further, the consummation of any definitive agreement would, inter alia, be subject to the approval of the transaction by the shareholders meeting of Praxair with the required majority, the acceptance of the holding company’s public exchange offer by a minimum of 75 % of the outstanding Linde shares, and clearance of the transaction by the competent regulatory authorities.