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EU: Praxair, Linde to close merger this year

By  |  July 5, 2018
Praxair sells European gas assets to Taiyo for around €5bn (US$5.9bn) to address EU antitrust concerns and secure approval for its merger with Linde. Praxair and Linde took a major step toward overcoming antitrust hurdles blocking their planned US$45 billion merger by agreeing to sell a raft of industrial-gas plants in Europe to Taiyo Nippon Sanso.

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    The Japanese supplier of oxygen and argon to the steel industry will pay €5 bn (US$5.9 bn) to expand its reach from Germany to Portugal and over to the UK, the companies said in statements on Thursday. The deal, first reported Wednesday by Bloomberg News, gives Taiyo Nippon a foothold in the region to compete head on with dominant suppliers Linde and Air Liquide SA of France.

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    Faced with an in-depth review by antitrust regulators in Europe, the divestment shows the two merger partners are prepared to bite the bullet to get their own deal done. The European businesses will allow Taiyo to move toward long-term goals of 1 trillion yen (US$9 billion) in sales, while its emergence in the region assuages concerns voiced by the region’s regulators of dwindling competition in the industrial-gases market.

    “In this era, M&A abroad is indispensable for survival,” said Minoru Matsuno, president of Tokyo-based investment adviser Value Search Asset Management Co., whose firm doesn’t hold Taiyo Nippon stock. “Taiyo doesn’t have bases in Europe in the industrial-gas business, so this deal makes sense in terms of the company’s strategic development.”

    Full Content: Bloomberg
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