Linde AG of Germany and the U.S. rival Praxair, intend to merge under a new holding company through an all-stock transaction.
The companies have signed a non-binding term sheet and expect to execute a definitive business combination agreement as soon as practicable, Linde informed in its statement on Wednesday.
Under the proposed terms of the transaction, Linde shareholders would receive 1.540 shares in the new holding company for each Linde share exchanged in the German offer, and Praxair shareholders would receive one share in the new holding company for each Praxair share.
Both Linde and Praxair would hold approximately 50 percent of the new holding company that will adopt the Linde name and have a current market value in excess of US$65 billion, according to Linde.
The combined company would be governed by a single board of directors with equal representation from Linde and Praxair.
Linde’s supervisory board chairman, professor Wolfgang Reitzle, would become chairman of the new company’s board. Praxair’s chairman and CEO, Steve Angel, would become CEO and a member of the board of directors.
The new holding company would be formed and domiciled in a neutral member state of the European Economic Area, with the CEO based in Danbury, Connecticut, USA. Corporate functions would be split between Danbury, Connecticut and Munich, Germany, the statement reads.
The parties expect to complete their internal approvals and execute the definitive business combination agreement in the coming months.
There is, however, no assurance that a binding definitive agreement will be reached between the parties, and the consummation of any binding transaction will be subject to shareholder and regulatory approvals and other customary closing conditions, Linde said.