Praxair Approaches Linde AG for Merger Talks—Again



Praxair and Linde AG reconsider a merger

Praxair (PX) and Linde AG have come to the table once again to talk about a possible merger after earlier merger talks fell apart. On August 16, 2016, both companies were engaged in preliminary merger talks, but on September 12, merger plans were dropped due to strategic considerations, including issues like headquarters changes and job losses, among others.

Linde AG has confirmed that it has received a revised offer from Praxair and that they will look into the merger proposal. Analysts estimate that the combined value of the new company would be $60 billion. Wall Street is also speculating that Praxair is willing to keep some of its functions in Germany, which became one of the deal-breakers in previous merger talks.

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Latest merger update

In the latest development, Linde CEO (chief executive officer) Wolfgang Buechele has stepped down from the CEO position, effective December 7, 2016. Buechele had been slated to serve the company until April 2017, but Linde has appointed Dr. Aldo Belloni as his replacement. Belloni resumed the position on December 8 and will serve to the end of 2018.

The merger between Praxair and Linde AG could add value to the shareholders of both the companies through synergies and business expansion. If the merger goes through, the combined company will become the biggest player in the industrial gas space.

ETF investment

Notably, investors can indirectly hold Praxair by investing in the iShares US Basic Materials ETF (IYM), which had 6.9% of its total portfolio in Praxair on December 9, 2016. The top holdings of IYM include DuPont (DD), Dow Chemical (DOW), and Monsanto (MON), with weights of 11.6%, 11.5%, and 8.1%.


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