Linde surges as it confirms Praxair merger approach

Shares in Linde AG surged on Wednesday after the German industrial gases company confirmed that it has received a revised proposal regarding a potential merger of equals with US rival Praxair Inc.

Linde said its board is reviewing the proposal, while Praxair said in a separate statement that it had approached the company regarding a potential merger.

“There can be no assurance that this will result in a transaction, or on what terms any transaction may occur,” Praxair said.

The companies abandoned merger talks back in September after they failed to agree on certain details of a deal, particularly about governance.

Olivetree Financial said this was “a much swifter move than the market was anticipating”.

“With Linde only having announced its own standalone restructuring plan a few weeks ago, and its management team in a state of flux, the assumption had been that although the prospects for a combination were by no means dead, Praxair would wait a while longer before attempting to reengage.

“The market is immediately pricing in approximately 20% of the synergy potential a combination should bring, showing there is still a healthy level of cynicism as to whether this will be welcomed by the German establishment.”

At 1017 GMT, Linde shares were up 6.8% to €160.35.