MOSCOW (MRC) -- Linde and Praxair's USD65 B merger talks are facing legal complexities that mean the agreement will not be finalized as planned before Linde's annual shareholder meeting on May 10, a source familiar with the situation said, reported Reuters.
The all-share US-German merger of equals is intended to create a market leader that will overtake France's Air Liquide and reunite a global Linde group split by World War One a century ago.
Adding to the complexities, the deal has met unexpectedly strong resistance from German trade unions who fear a dilution of their influence when the headquarters moves out of Germany and more profitable Praxair applies its operating practices worldwide.
A Linde spokesman said the two companies were still working towards finalizing the business combination agreement before the AGM, but could not rule out that it would be later.
Linde is not planning to allow shareholders to vote on the deal at the AGM, arguing that each investor would in any case have to make an individual decision whether to tender his or her shares.
German private-investor association DSW has already demanded that an extraordinary shareholder meeting be called if the deal is not wrapped up before the AGM.
As MRC wrote before, in early December 2016, Praxair approached the German company with fresh proposals for a merger of equals to create a world market leader valued at over USD60 billion. These proposals address several concerns that led Linde to call off earlier merger discussions in September 2016, principally the location of the merged group headquarters, management issues and potential job losses in Germany, according to insider reports.
We also remind that in early 2016, Linde AG has agreed with Gazprom to build a gas processing plant in eastern Russia. The plant will be part of Gazprom’s pipeline taking gas from eastern Siberia to China. The Amur Gas Processing Plant will be one of the largest in the world, with capacity of up to 49 billion cubic meters of natural gas annually. The plant will be constructed in five phases due for completion in 2024.
Besides, earlier, in 2013, SIBUR, a Russian gas processing and petrochemicals company, and Linde Group signed agreements to build and operate new air separation units in Dzerzhinsk, the Nizhny Novgorod Region. The main aim of the new unit is to supply the oxygen, nitrogen and compressed air required to SIBUR’s local ethylene oxide and glycols plants. Linde will also supply air gases to other customers at the Dzerzhinsk chemicals hub as well as to the regional market in Nizhny Novgorod and beyond. The new unit will have a total production capacity of around 30,000 cubic metres of gaseous oxygen per hour.
The Linde Group is a world-leading gases and engineering company with around 62,000 employees in more than 100 countries worldwide.
MRC