The on-again/off-again merger between industrial gas titans Praxair Inc., based in Danbury, and Linde AG of Munich is on again. The two companies announced this morning their intention to “combine in a merger of equals” that, based on 2015 reported results, would create a behemoth with pro forma revenues of about $30 billion prior to divestitures, and a current market value of over $65 billion.
The companies have signed a nonbinding term sheet and expect to reach a definitive business combination agreement soon, the companies said in a statement.
“The transaction would unite Linde’s long-held leadership in technology with Praxair’s efficient operating model,” according to the companies, which said they were targeting about $1 billion in annual benefits from the deal.
Under the proposed merger, Linde shareholders would receive 1.54 shares in the new holding company – which would retain the Linde moniker – for each of their existing shares, while Praxair investors would receive one share for each Praxair share they currently own, with the net result that each group of shareholders would own about 50 percent of the combined company.
Pending shareholders’ and regulatory approval, the new company will have a dual listing in New York and Frankfurt, and 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, while Praxair Chairman and CEO Steve Angel would become CEO and a member of the board of directors.
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 and corporate functions split between Danbury and Munich.
Linde had about 65,000 employees to Praxair’s 26,700 (roughly 400 of whom are in Danbury) as of the end of 2015, and approximately 70 percent more revenue.