FRANKFURT (Reuters) - Shares in Linde (LIN1.DE) plunged more than 8 percent on Monday after the industrial gases group’s planned $87 billion merger with Praxair (PX.N) was put in doubt by demands from U.S. antitrust regulators.
FILE PHOTO: Linde Group logo is seen at a company building in Munich-Pullach, Germany August 16, 2016. REUTERS/Michaela Rehle/File Photo
The U.S. Federal Trade Commission is asking for more assets to be sold than previously anticipated and the watchdog also wants prospective buyers to meet certain other requirements, the German industrial gases group said in a statement published just after midnight on Sunday.
“Linde and Praxair are analysing these expectations to assess their scope and to evaluate how they could be implemented to achieve a timely clearance of the business combination,” it said.
The planned combination in an all-shares merger, agreed in principle in December 2016, would create a global leader in gas distribution ahead of France’s Air Liquide (AIRP.PA).
The companies agreed at the time that if regulators demanded the disposal of businesses with more than $3.7 billion in sales or $1.1 billion in earnings before interest, taxes, depreciation and amortization (EBITDA), either party could withdraw without penalty.
Based on its discussions with the FTC and other antitrust regulators, it said there was now a higher probability that the two companies would need to sell assets exceeding the agreed threshold.
The two companies are now evaluating how the regulators’ expectations could be fulfilled in a mutually acceptable manner to achieve a timely clearance, it said, adding they remained in a constructive dialogue with the regulators and with each other.
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