​Linde, Praxair deal may face requests by third parties to divest regional assets in China

5 September 2018 10:42am

7 August 2018.

The proposed merger of Linde and Praxair may face a request from third parties to divest regional assets in China, because the deal has prompted local competition concerns, MLex has learned.

A number of industry players are closely following the ongoing transaction, and China’s competition authorities have actively reached out to them to collect their views.

It is understood that high levels of concentration for certain overlapping products in local markets in China, including one southern province, have stoked worries from domestic industry players.

As MLex previously reported, the State Administration for Market Regulation, or SAMR, is said to have received complaints raising regional competition concerns.

It is not yet clear how SAMR will evaluate the requests and complaints, but local industry concerns are expected to push the regulator to scrutinize the deal more closely.

It is understood that SAMR has been urged to impose a remedy that includes addressing worries over helium supplies following the transaction, as MLex reported.

Meanwhile, Chinese companies are also said to be interested in buying into the expected divestments required by competition authorities both at home and abroad.

German industrial gases company Linde recently disclosed that "discussions with various antitrust authorities have resulted in further indications that merger clearances of the business combination of Linde and Praxair could be subject to requirements more onerous than previously expected". 

In addition, Linde was informed that the US Federal Trade Commission expressed expectations with regard to further divestiture commitments and prospective purchasers, which are considered required for clearance of the merger.

Linde also said the two companies “remain in a constructive dialogue with the regulators and with each other on the required divestitures.”

Linde trades on the Frankfurt Stock Exchange, and Praxair trades on the New York Stock Exchange. The combined company would be named Linde and would be listed on both exchanges. Their "merger of equals" would create a new industry No.1, overtaking France's Air Liquide.

FTC - Qualcomm Trial