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.
The sources asked for anonymity because the negotiations are confidential. Praxair and Linde offered no immediate comment.
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.
By Jens Hack and Greg Roumeliotis
During a European Industry Summit held on the site of BASF in Antwerp, leaders from basic industry sectors, representing 7.8 million workers in Europe, joined forces with European trade unions and European leaders to address pressing concerns regarding Europe’s industrial landscape.
The use of blue or low-carbon hydrogen, made from natural gas with carbon capture and storage (CCS), could increase near-term global warming by 50% compared with burning fossil fuels directly for energy if emissions are not properly managed, according to a new study by NGO the US Environmental Defense Fund (EDF) and the University of Arizona.
In a move to improve the supply of renewable hydrogen and thus reduce dependence on natural gas and contribute to achieving the objectives of the European Green Deal and the REPowerEU plan, the EU Commission has approved a third Important project of common European interest (IPCEI) to support hydrogen infrastructure.