Blog Coverage Linde and Praxair Finally Announced Merger
Upcoming AWS Coverage on Gevo Post-Earnings Results
LONDON, UK / ACCESSWIRE / December 21, 2016 / Active Wall St. blog coverage looks at the headline from Praxair, Inc. (NYSE: PX) following months of on–off merger discussions with Linde AG. The long-time speculation regarding the merger of Linde and Praxair was finally put to rest with both companies announcing their intention to merge as equals. The merger would be an all-stock transaction and both companies have signed a non-binding term sheet on December 20, 2016. Both companies have also agreed to sign a definitive Business Combination Agreement "as soon as it is practical". The merger would create a global Industrial Gas behemoth with a combined value of $65 billion. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of Praxair's competitors within the Chemicals - Major Diversified space, Gevo, Inc. (NASDAQ: GEVO), reported on November 14, 2016, its financial results for the three months ended September 30, 2016. AWS will be initiating a research report on Gevo in the coming days.
Today, AWS is promoting its blog coverage on PX; touching on GEVO. Get all of our free blog coverage and more by clicking on the links below:
http://www.activewallst.com/registration-3/?symbol=PX
http://www.activewallst.com/registration-3/?symbol=GEVO
Commenting on the merger, Steve Angel, Praxair's Chairman and CEO said:
"The strategic combination between Linde and Praxair would leverage the complementary strengths of each across a larger global footprint and create a more resilient portfolio with increased exposure to long-term macro growth trends."
Professor Dr. Aldo Belloni, CEO of Linde added:
"Under the Linde brand, we want to combine our companies' business and technology capabilities and form a global industrial gas leader."
Breakup of the proposed deal
Both companies would combine to form a new holding company in an all-stock transaction. The holding company will operate under the brand name "Linde" and will be listed in both New York Stock Exchange and Frankfurt Stock Exchange. Under the agreement, shareholders of Linde would receive one share in the new company for each Linde's share owned by them. Similarly, Praxair's shareholders will receive 1.54 shares in the new company for each Praxair's share owned by them. This will result in both Linde and Praxair shareholders owning approximately 50% stake in the new holding company.
On completion of the merger, the new holding company will be governed by a single Board of Directors where both Linde and Praxair will have equal representation. Linde's Supervisory Board Chairman, Professor Dr. 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 CEO of the new holding company will operate from Danbury, Connecticut in the US and the corporate functions will be distributed between Danbury and Munich, Germany to help achieve efficiencies for the combined company.
The Business Combination Agreement
The merger between Linde and Praxair is completely hinged on the signing of the Business Combination Agreement. The process starts with the internal approvals from the respective companies followed by confirmatory due diligence, further negotiations and approvals from the Board of Directors of both Linde and Praxair. This process will take a few months and at this stage, there are no guarantees that the companies would even sign the Business Combination Agreement. Even if they do manage to sign the Business Combination Agreement, the merger will still need both the companies' shareholders' approval and will be subject to regulatory approvals and closing conditions.
Linde and Praxair are both confident of getting the necessary approvals including decisions for any required divestitures once the Business Combination Agreement is in place.
How both companies will benefit from the merger?
Financially the merger will result in significant annual synergies of approximately $1 billion due to benefits of scale, cost savings, and increased efficiencies.
Businesswise the merger would create a global industrial gas giant that would take the number one spot. The new company would be able to leverage Linde's long-standing leadership in technology and Praxair's operational excellence to strengthen its market position. The new entity will also be able to reach out to a key market across geographies and offer innovative, reliable and cost-efficient solutions to its customers.
Background
Linde and Praxair have had on-off talks about a potential merger for the last few months. In August 2016, rumors of the merger between Linde and Praxair started building momentum. Both companies acknowledged that they were in preliminary talks. In September 2016, both companies issued press statements saying that the preliminary talks about the potential merger have ended. In November 2016, Praxair confirmed that it had initiated talks with Linde once again to renew discussions regarding a potential merger.
Going forward, how the merger story changes direction is something that cannot be speculated at this time. Once can just wait and watch as the story unfolds.
Stock Performance
On December 20, 2016, following the news of the potential merger, Praxair's share price finished yesterday's trading session at $118.39, dropping 3.75%. A total volume of 4.68 million shares exchanged hands, which was higher than the 3 months average volume of 1.19 million shares. The stock has rallied 0.96% and 6.21% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have surged 18.71%. The stock is trading at a PE ratio of 22.43 and has a dividend yield of 2.53%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
