Linde, Praxair win U.S. antitrust nod to create gas giant

Linde and Praxair won approval from the U.S. antitrust enforcers for their $46 billion merger, paving the way for the companies’ two-year bid to create the world’s largest supplier of industrial gases.

The Federal Trade Commission said Monday it approved the deal on the condition that Linde and Praxair sell assets to resolve concerns that the combination would otherwise hurt competition.

The disposals pushed Linde to lower its outlook for cost savings from the deal, pledging between $1.1 billion and $1.2 billion over three years compared with $1.2 billion previously, according to a statement. It didn’t give a date for completion of the tie-up. Linde’s tendered shares rose as much as 7.4 percent in Frankfurt while Praxair stock jumped 3.5 percent in New York.

The transatlantic combination, which was more than two years in the making, will allow Linde and Praxair to leapfrog French rival Air Liquide to become the biggest supplier of gases like oxygen, nitrogen and helium for factories and hospitals. Approval from the FTC, which came just ahead of a Wednesday deadline, was the last major obstacle for the companies after they got a conditional nod in August from the European Union.

To gain European approval, they had agreed to sell Praxair’s entire gas business in the region as well as its stake in an Italian joint venture and several helium sourcing contracts. The FTC required the sale of additional assets in nine industrial gas markets to resolve competition concerns. These include the sale of Linde’s Clear Lake, Texas, plant to Celanese Corp. and Linde’s La Porte, Texas plant to LyondellBasell Industries.

A consortium of German industrial-gas supplier Messer Group and CVC Capital Partners agreed to buy a host of facilities worth more than $3.3 billion that Linde spent decades building up as part of its North American operations. Japanese rival Taiyo Nippon Sanso Corp. is acquiring Praxair’s entire European operation for almost $6 billion.

“The merger of Linde and Praxair is a compelling and transformative combination and an unparalleled opportunity,” said Linde Chairman Wolfgang Reitzle, who will keep the same role at the combined company.

The green light from the FTC is first decision on a major merger since Chairman Joe Simons took over the agency as chairman early this year. He is hosting a series of hearings to consider retooling and toughening merger enforcement amid criticism that antitrust officials have been too lax in policing deals, leading to increasing concentration across the economy.

The FTC voted 4-1 to approve the settlement with Commissioner Rohit Chopra dissenting. Chopra said the combination, even with the asset sales, “is not without risks to competition.” The FTC should have required Messer and CVC to notify the agency of plans to sell any of the business they’re acquiring.

Linde and Praxair began talks for a tie up in 2016 but they collapsed within months, leading to the departure of top executives. They were rekindled, although quickly hit up against a series of hurdles including opposition from unions, shareholder skepticism and tough demands from antitrust regulators.