Gas groups Linde, Praxair halt merger plans
Praxair confirmed the halt to the talks in a one-line statement of its own.
Frankfurt (AFP) - German industrial gas supplier Linde and US competitor Praxair said Monday they had abandoned plans for a merger that would have created the world’s biggest firm in the sector.
"Shareholder representatives in the supervisory board of Linde AG recommend... to terminate the preliminary talks with Praxair, Inc. about a potential merger," the company said in a statement.
Chief executive Wolfgang Buechele and the rest of the supervisory board agreed with the decision, the statement said.
"While the strategic rationale of a merger has been principally confirmed, discussions about details, specifically about governance aspects, did not result in a mutual understanding," it went on.
Praxair confirmed the halt to the talks in a one-line statement of its own.
Shares in Linde took a tumble as the Frankfurt stock market opened on Monday, losing 7.4 percent, while the DAX index of 30 leading companies fell 2.0 percent just after 0700 GMT.
A merger between Linde and Praxair could have allowed the German firm to overtake historic French rival Air Liquide as the world’s biggest industrial gas supplier, with estimated annual revenues of more than $30 billion.
But the tie-up would also have been subject to close regulatory scrutiny, as the number of large players in the market would have shrunk to three.
"There is no need for a merger at this scale in our view," analyst Peter Spengler of DZ bank said.
"We were not convinced that the merger would be beneficial for Linde shareholders."
At the time the merger talks were announced in August, analysts and markets welcomed the move, with both Linde and Praxair shares soaring.
Linde has suffered from weak orders for its turnkey industrial facilities, mostly sold to oil and natural gas companies, as oil prices have weathered punishing lows in recent years.
Gas sales, Munich-based Linde’s largest source of revenue, have remained more stable.
Linde employs 64,000 people worldwide, while Connecticut-based Praxair has 26,000 staff.
