HANDELSBLATT EXCLUSIVE

Linde’s European Works Council Strictly Opposed to Praxair Merger

main 27009122 source Jens Schlueter DAPD – Linde plant Leuna worker employee pipes 2012
Picture: Reuters

European labor representatives have expressed staunch opposition to industrial gas maker Linde’s planned merger with U.S. rival Praxair, according to a letter obtained by Handelsblatt.

Linde’s European works council, in a letter addressed to the company’s workers, said a merger with Praxair could result in considerable layoffs in some E.U. countries. There’s a threat that Linde’s core brand would be destroyed, according to the letter.

The works council said it plans to “vehemently oppose” the merger and called on all labor representatives in the company’s supervisory board to also vote against the deal. Reports that management and labor have moved closer together are false, the works council said.

Deputy Economics Minister Matthias Machnig said the “economic rationale for such a move hasn’t been convincingly demonstrated.”

According to information obtained by Handelsblatt, the non-executive supervisory board plans to hold a special session in April to discuss the merger, though a vote on the deal isn’t expected at the meeting.

The economics ministry, led by the center-left Social Democrats, is also skeptical of the planned merger given the mounting opposition among labor representatives.

“Such a planned merger requires the acceptance of the labor side,” Deputy Economics Minister Matthias Machnig told Handelsblatt. “This apparently isn’t present at the moment.”

Mr. Machnig also said the “economic rationale for such a move hasn’t been convincingly demonstrated.” A successful merger of Linde and Praxair would create the world’s largest industrial gas maker with a value of €61 billion, but the planned deal has faced opposition from the beginning.

In fact, the first attempt to ink a deal failed in September 2016 due to differences between the two companies over governance issues. Praxair subsequently reached out to Linde again, and the two companies picked up talks again in late 2016, finally reaching an agreement to merge in December.

The deal has been billed as a merger of equals. Though the merged group would operate under the name Linde, its day-t0-day operations would be run from Praxair’s headquarters in Connecticut, which has raised concern among labor and government officials in Germany about the status of Linde’s seat in Munich and possible layoffs.

 

Axel Höpner is head of the Handelsblatt office in Munich, focusing on the state of Bavaria’s companies, including Allianz and Siemens. To contact the author: hoepner@handelsblatt.com

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!