Linde, Praxair chose bidders for antitrust sell-off -sources

NIPPON SANSO HOLDINGS

12/04/2018 16:34

FRANKFURT/NEW YORK, April 12 (Reuters) - Gases groups Linde
 LIN1.DE  and Praxair  PX.N  have picked second-round bidders
for a package of planned divestitures to facilitate their
planned $79 billion merger, people close to the matter said.
    The companies have invited buyout firm CVC, which has tied
up with gases group Messer, to make further bids, as well as
private equity investors Carlyle  CG.O , Onex  ONEX.TO ,
Blackstone  BX.N , the sources said, adding that the investors
are expected to bid for all assets on offer.
    Linde and Praxair have put a package of U.S.-based assets up
for sale. In a bid to appeal to regulators and to attract a
broad range of suitors, the European assets have been split into
two alternative bundles, only one of which would be sold, the
sources said.    
    Japan's Taiyo Nippon Sanso  4091.T  is also still in the
auction and expected to bid for the European operations, while
the Canada Pension Plan Investment Board (CPPIB) is expected to
join a bidder as a co-investor, the sources said.
    Linde, Praxair and the bidders declined to comment or were
not immediately available for comment.
    Linde and Praxair are hoping they can strike a deal before a
Oct. 24 deadline, which is dictated by German financial market
regulations.
    EU antitrust regulators have set a deadline of Aug. 9 to
decide whether to give their go-ahead. The U.S. Federal Trade
Commission has also not yet cleared the transaction. urn:newsml:reuters.com:*:nL8N1R230T
 
    The exact size of asset sales has not yet been finalised in
negotiations with antitrust regulators.  urn:newsml:reuters.com:*:nL5N1QQ1BB
    But broad lines have become clear: Linde and Praxair are
planning to divest assets with about $800 million in combined
earnings before interest, tax, depreciation and amortization,
sources said, adding they expect them to sell at an enterprise
value of 10-12 times that, broadly in line with peers'
valuations. 
    Air Liquide and Air Products have antitrust-related
limitations to participate in the auction but may scoop up small
parts, the sources said. 
    Finding buyers for the assets would smoothe the regulatory
path to clearance for the merger. It comes in the wake of Bayer
 BAYGn.DE  agreeing to large divestitures to peer BASF
 BASFn.DE  to get the antitrust nod for its planned acquisition
of Monsanto.  urn:newsml:reuters.com:*:nL8N1RO4I8
    Linde and Praxair had said last year that either party could
walk away or seek to renegotiate the merger agreement if
divestitures reach more than 3.7 billion euros in total revenues
or 1.1 billion euros in combined core earnings (EBITDA).

 ($1 = 0.8037 euros)

 (Reporting by Arno Schuetze and Greg Roumeliotis; editing by
David Evans)
 ((arno.schuetze@thomsonreuters.com; +49.69.7565.1197; Reuters
Messaging: arno.schuetze.reuters.com@reuters.net))