Partial sale in Japanese: Linde share price increase: Linde and Praxair merge | message

The American company is now selling a $ 5 billion business package in Europe to its Japanese rival Taiyo Nippon Sanso, as companies announced on Thursday in Tokyo and Munich. This is to persuade the cartel of the EU to approve the agreement. Praxair devotes a large part of its European activities, for the Japanese, it would be the entry on the European market. The sale is subject to the merger between Linde and Praxair.

Brussels was skeptical about their merger because the market power of the two companies in Europe could become too great for certain gases such as oxygen and helium. The European Commissioner for Competition, Margrethe Vestager, therefore launched an in-depth review of the project in February

. Sales in other regions should also be divested, said Linde. These are Linde and Praxair in discussions with the authorities and are also in negotiations with potential bidders. Investors took this as a good sign that the company was globally successful: Linde shares rose 3.5% Thursday morning in the DAX. failed in September 2016 on the choice of headquarters and the structure of a unified company. The parts of Praxair that are now scheduled to be delivered to Europe generated a turnover of about 1.3 billion euros last year. Linde and Praxair have reserved the right not to sell more than 3.7 billion euros in revenue or 1.1 billion euros in operating income (ebitda) in sales. Otherwise, they could back down if larger sales are needed.

The entire market is expected to be completed by the end of the year. Since the shareholders are already in agreement, the merger can only fail because of excessive conditions or veto by the authorities of the agreement. The decision expected by the European Commission in August is the biggest obstacle. If all antitrust approvals are not available by October 24th, the planned merger since last year will be canceled. The European Commission deadline for trials until 24 August.

The two companies want to join together to become the largest industrial gas manufacturer in the world. With 80,000 employees and an annual turnover of 28 billion euros, they would control a quarter of the global market. The new Linde plc will be led by Praxair CEO Steve Angel of the United States. IG Metall fears the loss of jobs and participation rights.

What Analysts Say

From the point of view of JPMorgan's badyst Chetan Udeshi, the approval of the EU's competition authorities is now very likely. According to Udeshi, Linde and Praxair have played with the competition and sold much more than expected. The sales of the company are intended to limit the potential market power of both groups in Europe. Praxair will soon lose about 97% of its operating profit in the gas sector in Europe, said expert JPMorgan. He had calculated up to here only about 60 percent. The Japanese have thus paved the way for Europe and the price of 5 billion euros from Udeshi is much more attractive than expected.

What the Shares Do

Investors reacted accordingly positively: The papers already traded (Linde), which currently belong to the DAX, have climbed 3.4 % to 207.50 euros. The other Linde shares (Linde) gained 1.1% to 180.10 euros. Until now, Brussels was skeptical about the case of the two gas manufacturers. The decision is expected in August.

/ zb / men / stw / jha /

TOKYO / MNCHEN (dpa-AFX)

Image Sources: Praxair, Linde, Damke Henner / Shutterstock.com