German industrial gas company Linde has announced that the 10-week acceptance period for its proposed merger with US firm Praxair has begun. The exchange offer, which will create a $75bn industry leader under the Linde name, will be finalised on October 24 – pending approval.
In order for the deal to go ahead, it must first be approved by a majority of Praxair shareholders. Their Linde counterparts will not receive a vote on the merger, but will be required to tender 75 percent of the company’s shares before the deal can be completed.
The news that the acceptance period has begun is a positive step forward for the merger, which has faced criticism since being proposed in December. One of the move’s biggest stumbling blocks came from German trade union officials, who felt the deal was being imposed without establishing a consensus with the workers, going against usual practice in Germany.
If the merger is approved it will see the new company overtake France’s Air Liquide to become the biggest player in the industrial gas industry
A spokesperson for trade union group IG BCE told Reuters it was “regrettable” that members of the board did not take up the offer for further discussions with labour representatives. However, after receiving guarantees on the security of German jobs, the majority of representatives ultimately backed the deal.
If the merger is approved it will see the new company overtake France’s Air Liquide to become the biggest player in the industrial gas industry, with $30bn in revenue and 88,000 members of staff.
The merger, expected to complete in the second half of 2018, also promises significant financial benefits to the company and its shareholders. It is predicted new efficiencies will save the company $1.2bn within the first three years, as well as helping it achieve a market value of $100bn within five years.