MUNICH, GERMANY/ DANBURY, US: Linde AG and Praxair Inc have entered into a definitive business combination agreement (BCA) to come together under a new holding company through an all-stock merger of equals transaction. Both the companies expect the transaction to close in the second half of 2018.
The proposed merger brings together two leading companies in the global industrial gas industry, leveraging the proven strengths of each. The transaction unites Linde’s long-standing leadership in engineering and technology with Praxair’s efficient operating model — creating a global leader.
The combined company will have a strong presence in all key geographies and end-markets, which will result in a more diverse and balanced global portfolio as well as increased exposure to long-term macroeconomic growth trends. With a strong culture of innovation, sustainability and performance, the new company will enable the development and delivery of a broad range of products and solutions to customers and provide enhanced value for its employees, shareholders and communities.
“This combination is a compelling and transformative opportunity to create a world-class leader in the industrial gas industry,” said Steve Angel, Chairman and CEO of Praxair. “The combined company will give us the opportunity to leverage the individual strengths of both companies across a much larger global footprint and enhance our ability to drive innovation and growth.”
“This merger is a once-in-a-lifetime opportunity to form a great global industrial gas company poised to deliver value for customers, employees and shareholders alike. The new company is well positioned in all key markets and regions and can build on its exceptional R&D expertise,” said Aldo Belloni, CEO of Linde AG.
Value Creation
The merged company is expected to create significant value for shareholders through the realisation of approximately $1.2 billion in annual synergies and cost reduction programs that are expected to be achieved over a period of approximately 3 years following closing.
Governance and leadership
The new company will be governed by a 12-member board of directors with equal representation from Linde and Praxair. Linde´s supervisory board chairman, Wolfgang Reitzle, will become chairman of the new holding company´s board.
Praxair´s chairman and CEO, Steve Angel, will become CEO of the new group and will also be a board member of the new holding company.
The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in UK. The group CEO will be based in Danbury, Connecticut, US and group corporate functions will be appropriately split between Danbury, Connecticut and Munich, Germany to help achieve efficiencies for the combined group.
The new group will adopt the globally-recognized and respected Linde name reflecting our shared history and heritage.
Proposed transaction structure
Under the proposed terms of the transaction, Linde shareholders will be offered 1.54 shares in the new holding company for each Linde share, and Praxair shareholders will receive one share in the new holding company for each Praxair share. As a result, current Linde and Praxair shareholders will each own approximately 50 percent of the combined company assuming a 100 percent share exchange in the exchange offer.
Listing
The combined company will be listed on both the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange (Prime Standard segment). The new company will seek inclusion in the S&P 500 and DAX 30 indices.
Advisors
Perella Weinberg Partners and Morgan Stanley are acting as financial advisors. Hengeler Mueller, Cravath, Swaine & Moore and Linklaters (regulatory) are serving as legal counsel to Linde.
Credit Suisse is acting as an exclusive financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Praxair.
© Worldofchemicals News
Read More: Linde, Praxair merger to shake up industrial gases sector
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