Linde and Praxair confirms negotiate a merger – Zonebourse.com

Berlin – Hardly acquired, instead of the world leader in industrial gases Air Liquide already teetering, while his great German rival Linde is also considering merging with an American Praxair

. Linde and Praxair confirmed Tuesday after several media got wind of the negotiations they were conducting “preliminary discussions on a possible merger.” The Wall Street Journal had first spilled the beans.

“The discussions are ongoing and have not yet led to any concrete results,” according to press releases from both companies, “it is not possible anticipate at present whether, or on what terms, a transaction will materialize. “

If the reconciliation seems far from fact, his outlook was enough to fly Stock Exchange the Linde share. She took 10.48% to 153.95 euros at 2:20 p.m. GMT on the Frankfurt Stock Exchange. In New York, the Praxair as advanced over 3% at the same time.

Linde and Air Liquide have long been neck and neck in the market for industrial gases used in the medical field and in a multitude of industrial processes, from chemistry to electronics via the food and energy.

the french dethroned German first world with the acquisition, curly late May, the US Airgas, which should increase its annual turnover to 20 billion euros. With this transaction, Air Liquide took “one step ahead”, recently congratulated his boss Benoît Potier

The advance could be short-lived if Linde and Praxair are dealing. Marriage would create a company weighing more than 26 billion euros ($ 30 billion) in revenue.

overlap

According to Peter Spengler, an analyst at German bank DZ bank, marriage underway between Air Liquide and Airgas “makes it more likely a merger between Linde and Praxair.”

a force takeovers and mergers, the number of major players in the market is shrinking, and those which remain have more room for maneuver to impose prices to their customers

so if this new operation is done, the number of big players will increase to three. the new German-American group Air Liquide and American Air Products.

Mr. Sprengler sees “significant synergies” between Linde and Praxair, whose specialty areas largely overlap, but has doubts about the green light from European competition authorities, for the same reason. In the US, however this should not be a problem, he said, Linde is particularly active in the field of medical gases and Praxair in gases for industry.

According to Bloomberg News, which quoted sources familiar with the negotiations, possible asset sales to appease the anti-trust authorities have already been mentioned in the discussions.

Praxair and Linde have both activities other than the gas, namely the sale of turnkey plants and, for the second, logistics services. But recently, at least for Linde, the activity of industrial services suffered from the fall in oil prices, most of its customers hiring in the oil and gas sector.

In contrast in this very cyclical business, gases, by far its largest division, appear as a defensive sector, that is to say a safe bet less subject to the vagaries of the economy.

Linde, based Munich, employs over 64,000 people worldwide and Praxair, which is headquartered in Connecticut, about 26,000.