Linde turns to winning over investors to Praxair merger

Fri Jun 2, 2017 11:16am EDT
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By Georgina Prodhan and Jörn Poltz

MUNICH (Reuters) - German industrial gases company Linde (LING.DE: Quote) turned its attention on Friday to winning over investors to its planned $75 billion merger with U.S. peer Praxair (PX.N: Quote), a task that Chairman Wolfgang Reitzle said was not straightforward.

A day after securing board approval in the face of unexpectedly tough trade union opposition, executives hailed the "historic" deal that will create the world's biggest gases group and reunite a company split 100 years ago by World War One.

"We have taken an important first step toward realizing this once-in-a-lifetime merger opportunity," Praxair CEO Steve Angel told a news conference in Linde's home city of Munich.

The deal agreed after a marathon Linde supervisory board meeting on Thursday will create a global leader to overtake France's Air Liquide (AIRP.PA: Quote) with combined market value of $75 billion, revenue of $30 billion and 88,000 staff.

Angel and Linde CEO Aldo Belloni told Reuters they would at once head off on a roadshow to sell the merits of the deal. Linde needs 75 percent of shareholders to tender their shares to the new company, while Praxair needs a simple majority vote at a shareholder meeting.

Executives said they were prepared to make the divestments needed to satisfy anti-trust regulators in 25 countries, particularly in the United States, but had set a "pain threshold" beyond which the deal might no longer make sense.

Angel said the merger agreement set these thresholds at $3.7 billion in sales or $1.1 billion in core earnings (EBITDA). Above these limits, either party could walk away from the deal without penalty, he told analysts.

Executives from both companies said they did not expect regulators' demands to approach this level.   Continued...

Praxair Chief Executive Officer Steve Angel (R-L), Linde Chairman of the Board Wolfgang Reitzle and Linde CEO Aldo Belloni arrive for a news conference in Munich, Germany June 2, 2017. REUTERS/Michaela Rehle