MUNICH, GERMANY: Linde AG agreed on a non-binding term sheet with Praxair Inc, outlining the terms and condition of a potential 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. The new holding company will launch a public exchange offer to the shareholders of Linde.
The transaction is expected to create considerable value, resulting in approximately $1 billion in annual synergies.
The deal and the public exchange offer is based on a 50 percent: 50 percent valuation ratio of Linde and Praxair. Linde shareholders would receive 1.540 shares in the new holding company for each Linde share and Praxair shareholders would receive one share in the new holding company for each Praxair share.
The new holding company shall be listed on the New York Stock Exchange and on the Frankfurt Stock Exchange. Membership in the board of the combined company will be split 50: 50 between the companies.
The current chairman and CEO of Praxair, Steve Angel, will become CEO of the new holding company; the current Chairman of the Supervisory Board of Linde, Professor Dr Wolfgang Reitzle, will become chairman.
The new holding company would be formed and domiciled in a neutral member state of the European Economic Area (EE"), with the CEO based in Danbury, Connecticut US. Corporate functions would be appropriately split between Danbury and Munich to help achieve efficiencies for the combined company.
There is no guarantee that a binding definitive agreement on the combination will be reached or that a transaction will be achieved. 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 the board of directors of Praxair and the executive board and the supervisory board of Linde, the company said.
Read More: Linde, Praxair agree terms on 50-50 merger plan
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