Gas suppliers Praxair, Linde hold merger talks

Tue Aug 16, 2016 10:04am EDT
 
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By Mike Stone and Jens Hack

NEW YORK/MUNICH (Reuters) - U.S. industrial gas supplier Praxair Inc (PX.N: Quote) and German peer Linde AG (LING.DE: Quote) are in early-stage talks about a merger to create a market leader with a value of more than $60 billion, Linde said on Tuesday, sending shares in both companies higher.

An agreement would accelerate consolidation sweeping the industrial gas sector where slower economic growth has weakened demand in the manufacturing, metals and energy sectors and put pressure on smaller players to compete.

A combination of Praxair and Linde, which supply gases such as nitrogen, argon and carbon dioxide, would face scrutiny from regulators after other major deals, such as U.S. oilfield services provider Halliburton Co's (HAL.N: Quote) $34.6 billion acquisition of Baker Hughes Inc (BHI.N: Quote), were shot down due to antitrust concerns.

Linde has a strong position in healthcare in North America, where it supplies gases to hospitals and patients with respiratory disorders.

Praxair is more focused on industrial on-site production, which means a market share of close to 50 percent resulting from a merger should not spark opposition from U.S. anti-trust regulators, analysts said.

Linde said talks were ongoing and had not yet yielded any concrete results or agreements.

"Accordingly it is currently not foreseeable whether there will be any kind of transaction," it said in a statement.

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Linde Group logo is seen at its headquarters in Munich, Germany August 15, 2016. Picture taken on August 15, 2016. REUTERS/Michaela Rehle