Unions threaten to scupper Linde-Praxair merger
By Georgina Prodhan and Jens Hack
FRANKFURT/MUNICH (Reuters) - Linde (LING.DE: Quote) labor representatives will vote against the German industrial gases group's planned $65 billion merger with U.S. rival Praxair (PX.N: Quote), the head of the German works council told Reuters on Thursday, in a move that could scupper the deal.
The merger would entail significant job losses to achieve the promised $1 billion of synergies, with Linde bearing the brunt, while workers would lose their influence on strategy with the headquarters set to move from Germany, Gernot Hahl said.
Linde and Praxair are racing to finalize a deal by Linde's annual shareholder meeting on May 10, after agreeing a non-binding term sheet in December. It would then have to be approved by the boards of both companies.
"Our position in the supervisory board is: No, we will not approve the merger," Hahl said by phone.
Linde's supervisory board, half of which is made up of labor representatives, voted unanimously in favor of the intention to merge in December, in exchange for job guarantees through 2021 for Linde's 8,000 German workers.
Linde had until now characterized negotiations with its workers as constructive. "The negotiations with Praxair are proceeding as planned," a Linde spokesman said on Thursday. He declined to comment on labor relations.
After a meeting with Linde executives last week, the company's European works council sent a letter to staff saying it had become obvious the merger would lead to significant job losses in European countries outside Germany. The company employs several thousand people elsewhere on the continent.
"The European Works Council members and the workforce will therefore vigorously oppose the planned merger with Praxair," said the letter seen by Reuters on Wednesday. Continued...