Praxair and Linde resume tie-up talks

PRAXAIR has resumed talks with Linde about a merger of the two industrial gases firms, after talks broke down two months ago.

The two companies have issued short statements confirming that Praxair has once again approached Linde about a deal to form a “merger of equals”. Confirmation that the companies were talking about a deal to create the world’s largest industrial gases player first emerged in August. However, the discussion was abandoned in September, with Linde noting that while the companies could agree on the strategic rationale for a tie-up, a mutual understanding around details on governance could not be reached.

Praxair said in a statement released yesterday: “There can be no assurance that this [resumption of talks] will result in a transaction, or on what terms any transaction may occur. Praxair does not intend to comment further at this time.”

If the deal were to go ahead it would continue a trend of consolidation in the sector, which saw Air Liquide become the largest industrial gases firm after buying Airgas for US$13.4bn in a deal approved earlier this year.

Consolidation among industrial gas producers follows slower economic growth and weakening demand from industry sectors including energy and minerals.

A deal between Praxair and Linde would propel the merged firm to the top spot among industrial gases firms, though would likely raise significant competition concerns.