Praxair Inc and Linde AG, the industrial gas companies that agreed earlier this month to revive merger talks, are close to finalizing the terms of the potential deal, people familiar with the matter said on Friday.
The move comes after Danbury, Connecticut-based Praxair provided new assurances to Munich, Germany-based Linde over corporate governance and jobs, the sources said. Its previous bid to create a $65 billion industrial gas giant failed in September amid disagreements over these issues.
A final term sheet may be finalized by the two companies by next Wednesday or Thursday, the sources said, cautioning that it was always possible for last-minute disagreements to arise.
Linde and Praxair, alongside rivals Air Liquide SA and Air Products and Chemicals Inc, are struggling with slower economic growth that has weakened demand from the manufacturing, metals and energy industries and put pressure on smaller players, leading to further consolidation in the sector.
Earlier on Friday, Juergen Wechsler, head of the IG Metall union in Bavaria, said: “powerful forces” within the company are now at work to ensure that a consensus is reached about a combination.
German unions IG BCE and IG Metall have struck a deal with Linde’s management to avoid forced redundancies in Germany before 2021, Buechele said.
“We will try to save as much as we can,” Wechsler told Reuters.
“It is about employees, locations, headquarters, and about co-determination,” he said, adding that unions had already been given far-reaching assurances including a guarantee that a site in Dresden will not be closed.
Wolfgang Buechele, the recently departed chief executive of Linde had sought up to 4,000 job cuts in Germany after the company broke off initial merger talks.
On Dec. 7, Buechele paved the way to a revived deal by stepping down with immediate effect. “With the resumption of the talks, a successful merger is now drawing near,” Buechele said in a statement at the time.
Among other concessions Praxair has made to Linde to structure the deal as close to a merger of equals as possible, it has agreed for the combined company to have a second base in Munich, in addition to its headquarters in Connecticut, according to the sources.
The combined company will also have two stock listings, one in New York and one in Frankfurt, according to the sources.
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Source: Reuters.com
