FRANKFURT (Reuters) - The planned $74 billion merger of German industrial gases group Linde (LING.DE) and U.S. peer Praxair (PX.N) is on course, with regulators expected to finish reviewing offer documents by mid-August, Linde said as it published financial results on Friday.
“We remain on track to complete these tasks and expect to close the transaction by the second half of next year,” Linde Chief Financial Officer Sven Schneider told analysts during a conference call but was otherwise tight-lipped on what progress preparations for the transaction were making.
The deal will create a global leader to overtake France’s Air Liquide (AIRP.PA) with a combined market value of $75 billion, revenue of $30 billion and 88,000 staff.
Linde will need 75 percent of its shareholders to tender their stock to the new company in a 10-week acceptance period expected to start in September. Praxair needs a simple majority vote at a shareholder meeting.
The two companies also need to obtain anti-trust approval for the merger in 25 countries, for which they have said they were prepared to make divestments up to a “pain threshold” of $3.7 billion in sales beyond which the deal may no longer make sense.
Praxair’s finance chief told analysts on Thursday the group had already seen a “significant” amount of unsolicited interest in assets it could put up for sale.
“A formal process is being developed, which will be communicated to prospective buyers in the coming months,” Matthew White said on a conference call after the U.S. group published quarterly financial results.
The group reported a 4.8 percent rise in second-quarter operating profit and narrowed its forecast range for adjusted 2017 earnings per share to $5.63 to $5.75 from $5.55 to $5.80.
It said it was taking a more “measured” view of the second half of the year, citing concerns over demand in the United States and political turmoil in Brazil.
Linde stuck with its full-year outlook for operating profit to rise by up to 7 percent and revenue to be flat, plus or minus 3 percent.
Its second-quarter operating profit before depreciation, amortization and special items rose 2 percent to 1.08 billion euros, beating the average estimate of 1.04 billion in a Reuters analyst poll thanks to Asia and Europe.
Reporting by Georgina Prodhan; Editing by Maria Sheahan and Susan Thomas