Linde-Praxair Disposals Said to Draw CVC, Advent and Carlyle

(Bloomberg) -- Linde AG and Praxair Inc. are considering selling assets to preempt regulators’ concerns about their merger, drawing interest from bidders including CVC Capital Partners and Advent International, people familiar with the matter said.

CVC is in talks with privately held German gas firm Messer Group GmbH about a joint bid, and Carlyle Group LP is also weighing an offer, the people said, asking not to be identified because the deliberations are private. Goldman Sachs Group Inc. and Deutsche Bank AG are advising on the potential sales, the people said.

Linde’s combination with Praxair will create the world’s largest supplier of industrial gases. The companies could consider divestitures of businesses that generated as much as of 3.7 billion euros ($4.2 billion) in revenue as of December, or 1.1 billion euros in earnings before interest, tax, depreciation and amortization, they’ve said in a regulatory filing. 

Representatives for Linde, Praxair, CVC, Advent, Carlyle Goldman Sachs and Deutsche Bank declined to comment.

“The merger between Linde and Praxair will lead to divestments in many regions and countries for antitrust reasons,” Messer said in an emailed statement. The company will carefully examine opportunities resulting from the sales “within the scope of its growth strategy and its financial capabilities for its existing markets in Europe, China and Vietnam, as well as industrial gas markets outside this territory.”

Praxair Chief Executive Officer Steve Angel has said the U.S. will be the largest market reviewed for divestitures as part of the deal, though the companies’ objective is to minimize the sales.

The move to head off regulatory concerns about the combination echoes Bayer AG’s auction of several large assets in the midst of acquiring U.S. seeds specialist Monsanto Co. Bayer is considering selling a number of its seeds businesses as it works to get approval for the merger, people familiar with the matter said previously.

The companies are likely to start divesting assets after the completion of tender offer for shareholders -- who must agree to exchange at least 75 percent of Linde’s shares for stock in the new company in order for the Praxair combination to be successful -- Baader Helvea analyst Markus Mayer said in a note to investors Monday.

--With assistance from Stephen Stapczynski and Aaron Kirchfeld

To contact the reporters on this story: Eyk Henning in Frankfurt at ehenning1@bloomberg.net, Sarah Syed in London at ssyed35@bloomberg.net, Kiel Porter in New York at kporter17@bloomberg.net.

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net, Aaron Kirchfeld at akirchfeld@bloomberg.net, Amy Thomson, Timothy Sifert