Linde-Praxair merger in doubt following regulator demands

A MERGER to create the world’s largest industrial gases firm is in doubt after anti-trust authorities demanded that Linde and Praxair sell off more assets to secure approval.

Linde has revealed that the US Federal Trade Commission’s (FTC) requirements are “more onerous than previously expected” and that the demands are likely to exceed the thresholds originally set by the two companies, which agreed to merge in December 2016. The companies agreed that if regulators demand they sell off businesses with more than €3.7bn (US$4.29bn) in sales or €1.1bn in earnings before interest, tax, depreciation and amortisation, then either could abandon the deal without penalty.

Linde says that based on ongoing discussions with the FTC and other anti-trust authorities there is a higher probability that the threshold will be exceeded.

Last month, Linde agreed to sell to Messer industrial gas businesses in the Americas that had revenues of US$1.7bn in 2017.

The companies must now decide whether to sell off more businesses, which will arguably erode the benefits of the tie-up, or walk away from the deal. One analyst quoted by the Financial Times put the chance of completing the merger at 50%, while another talking to Reuters said it is 85%.

“Linde and Praxair remain in a constructive dialogue with the regulators and with each other on the required divestitures,” Linde said in a statement.