Industrial-gas giants Praxair Inc. and Germanys Linde AG concluded a two-year courtship Tuesday, Dec. 20, 2016, agreeing to join forces to create the industrys biggest player with a combined market value of $66.6 billion.
Labor delegates, who enjoy equal representation with shareholder delegates under German law on Linde's supervisory board, had threatened to scupper the deal, but finally approved it after receiving job guarantees for Linde's German workforce.
After a failed attempt at a tie-up past year that led to the departure of Linde's two top executives, Chairman Wolfgang Reitzle managed to stop labor representatives from blocking the deal in a marathon supervisory board meeting on Thursday. As per reports, Chairman Wolfgang Reitzle did not need to use his double vote to push the tie-up through.
Linde shareholders will receive 1.54 shares in the new holding company for each Linde share and Praxair shareholders will receive one share in the new holding company for each Praxair share.
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Linde's supervisory board voted by six-to-five in favour of the merger, with one labour representative abstaining, four sources familiar with the matter told Reuters.
The combined company - also named Linde - will form a new holding company based in Ireland. Most governance activities including board meetings will take place in Britain.The companies raised their cost-savings target from the merger to $1.2 billion euros from $1 billion within three years - including efficiency programs already initiated.
Matthias Machnig, secretary of state in Germany's economy ministry, said: "An opportunity to win the acceptance of workers for the planned merger was unfortunately missed with today's decision in the supervisory board".
Praxair Chief Executive Steve Angel said he was confident that any anti-trust remedies imposed would be manageable.
Linde was up 2.91% at 174.90 in late trading in Frankfurt, while Praxair was up 2.49% at $135.59 at 1.11 pm in NY.More news: Kevin Durant says he doesn't remember Rihanna staredown
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