Linde Says $46 Billion Merger With Praxair Is on Track

(Bloomberg) -- Linde AG said it’s on track to complete a $46 billion tie up with Praxair Inc. as the industrial gas suppliers await a decision by European regulators on whether their planned asset sales are enough to satisfy antitrust concerns.

“Linde and Praxair continue to assume that they will be able to complete the business combination in the second half of 2018,” the German company said in a quarterly earnings statement Wednesday. “The merger control and regulatory processes are in full swing.”

Linde shares rose as much as 4 percent after earnings beat expectations. The numbers indicate “gaining recovery momentum at industrial gases,” wrote Baader Helvea analyst Markus Mayer, who has a buy rating on the stock.

Second-quarter operating profit rose 3.3 percent to 1.13 billion euros ($1.31 billion), helped by efficiency programs and good macroeconomic conditions, the Munich-based company said. Revenue increased 1.1 percent to 4.46 billion euros.

Linde and Praxair have announced more than $9 billion in asset sales this month as the companies work against a self-imposed October deadline to push through a tie up that would create the largest supplier of gases like oxygen and nitrogen widely used in manufacturing. Last week, Linde announced it was selling most of its North and South American businesses for $3.3 billion, and Praxair said earlier in July it would divest its European assets for $5.9 billion.

Faced with an in-depth review by the European Commission of their long-sought combination, they are now hoping the disposals will lead to approval of the deal. The commission had warned the merger would leave the industrial gas market with just three players, including Linde-Praxair, potentially exposing the market to coordinated price increases.

Linde has left open the possibility that more disposals might be needed. The company said Wednesday sales negotiations with potential buyers for the logistics business called Gist were abandoned in the second quarter.

Tendered Linde shares rose 3.6 percent to 215 euros at 9:18 a.m. in Frankfurt, taking the increase to 12.5 percent this year and giving the company a value of 39 billion euros.

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