Linde, Praxair To Combine To Create Global Major

(RTTNews) - Linde AG (LDE.L, LNAGF.PK) and Praxair, Inc. (PX), major players in the gas industry, Tuesday announced their plan to combine in a merger of equals under a new holding company through an all-stock transaction.

As per the agreement Under the proposed terms of the transaction, Linde shareholders would receive 1.540 shares in the new holding company for each Linde share exchanged in the German offer, and Praxair shareholders would receive one share in the new holding company for each Praxair share. As a result, current Linde and Praxair shareholders would each own approximately 50 percent of the combined company, assuming a 100 percent share exchange in the German offer.

The companies said they have signed a non-binding term sheet and expect to execute a definitive Business Combination Agreement as soon as practicable.

The merged entity is expected to create significant value for shareholders through the realization of approximately $1 billion or 0.9 billion euros in annual synergies, driven by scale benefits, cost savings and efficiency improvements. Based on 2015 reported results, the combination would create a company of pro forma revenues of around $30 billion or 28 billion euros, prior to any divestitures, and a current market value in excess of $65 billion 61 billion euros.

The combined company would adopt the globally-recognized Linde name and be listed on both the New York Stock Exchange and the Frankfurt Stock Exchange and will seek inclusion in the S&P 500 and DAX indices.

The combined announcement said the proposed merger would create a global leader, uniting Linde's long-held leadership in technology with Praxair's efficient operating model. The companies said the combined entity would enjoy strong positions in all key geographies and end markets and create a more diverse and balanced global portfolio.

The combined company would be governed by a single Board of Directors with equal representation from Linde and Praxair. Linde's Supervisory Board Chairman Wolfgang Reitzle would become chairman of the new company's Board. Praxair's Chairman and CEO, Steve Angel, would become CEO and a member of the Board of Directors.

Steve Angel, Praxair's Chairman and CEO said, "We consider this to be a true strategic merger, as it brings together the capabilities, talented people and best-in-class processes of both companies, creating a unique and compelling opportunity for all of our stakeholders."

Aldo Belloni, CEO of Linde said, "Under the Linde brand, we want to combine our companies' business and technology capabilities and form a global industrial gas leader. Beyond the strategic fit, the compelling, value-creating combination would achieve a robust balance sheet and cash flow and generate financial flexibility to invest in our future."

The new holding company would be formed and domiciled in a neutral member state of the European Economic Area, with the CEO based in Danbury, Connecticut USA. Proposed Merger Structure

The parties expect to complete their internal approvals and execute the definitive Business Combination Agreement in the coming months.