Shares in gas giant Linde plunge on merger snag

FRANKFURT AM MAIN: Linde shares plummeted on Monday after the German industrial gases giant warned that its planned merger with Us-based Praxair had run into a major hurdle, with US competition regulators unexpectedly pushing it to offload more assets.

Linde’s share price fell 9.1 per cent to 191.10 euros ($221) by 0820 GMT in Frankfurt, against a Dax blue-chip index down 0.36 per cent.

The slump came after Linde said at the weekend that new measures demanded by US regulators to ease competition concerns could exceed a “threshold” agreed with Praxair — potentially scuppering the deal.

The proposed tie-up would create the world’s largest industrial gases firm with annual revenues of more than $30 billion, overtaking Linde’s longtime French rival Air Liquide.

Antitrust authorities on both sides of the Atlantic are closely scrutinising the deal, and Linde said in a statement that efforts to win approval for the merger could be subject to requirements “more onerous than previously expected”.

Demands by US regulators for further divestitures “are likely to exceed a threshold for merger clearances previously agreed between Linde and Praxair”, it added.

According to Bloomberg News, both groups agreed in advance they could pull out of the merger if they were forced to offload units with more than 3.7 billion euros in annual revenues, or 1.1 billion euros in earnings before interest, depreciation and amortisation.

Linde said discussions with US regulators were continuing to find “a mutually acceptable result”.

Hoping to earn competition authorities’ favour for the merger, Linde has already agreed to sell off much of its business in the Americas for $3.3 billion if the deal goes ahead. — Reuters