The boards of Linde and Praxair voted on Thursday to merge, creating a US$73 billion global industrial gases leader in what is likely to be the last in a wave of combinations that has resulted in a highly consolidated market, Reuters reports.
The deal combines US firm Praxair’s operational efficiency and strength in the Americas with the leading technology of Germany’s Linde and its strong presence in Europe and Asia, overtaking main competitor France’s Air Liquide.
News of the merger, which will reunite a global Linde group that was split a century ago by World War I, sent Praxair shares in the United States to a record high. The stock was trading up 1.9 percent at US$134.83 by 1906 GMT.
The all-share merger of equals, which still has to be approved by a majority of Praxair’s shareholders, represents a triumph for Linde’s Wolfgang Reitzle, a former chief executive who returned as chairman to seal the deal.
Linde’s shareholders will not vote on the deal but 75 percent must tender their shares to the new company for the deal to go through.
Reitzle, who effectively discarded Linde’s former CEO and finance chief to push through the merger after a failed attempt last year, was spared from having to use his casting vote as chairman when labor opposition crumbled at the last minute — as reported by Reuters on Wednesday.
Labor delegates, who enjoy equal representation with shareholder delegates under German law on Linde’s supervisory board, had threatened to scupper the deal, but in the end were divided by German job guarantees conditional on the merger.
Linde’s supervisory board voted by six to five in favor of the merger, with one labour representative abstaining, four sources familiar with the matter said.
The new holding company will be incorporated in Ireland, where workers do not have the co-determination rights that they do in Germany over company strategy. Most governance activities including board meetings will take place in Britain.
The companies raised their cost-savings target from the merger to US$1.2 billion from US$1 billion within three years – including efficiency programs already initiated.
The deal is expected to close in the second half of 2018, the two companies said.
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