Germany’s Linde (LNEGY) said it terminated talks with Praxair (PX) to create the world’s largest industrial gas supplier both in terms of revenue and market value, less than a month after they announced they were in discussions.
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In a statement, Linde said its shareholder representatives in the supervisory board, in consensus with the CEO of Linde recommended termination of merger talks with Praxair. Linde said the strategic rationale of a tie-up in principle remained.
The U.S. company also confirmed the termination of talks. Linde’s supervisory board chairman Wolfgang Reitzle was expected to become chairman of the merged company.
Linde shares dropped nearly 9 percent in early trading and by 0712 GMT (03:12 a.m. EDT) were down 7.8 percent at 137.30 euros, at the bottom of the German blue-chip index .GDAXI and their lowest level in a month.
A Praxair gas truck leaves a company air separation plant and hydrogen storage facility.
The merger was expected to result in more than $1 billion in annual synergies, one of the people familiar with the talks said.
“There is no need for a merger at this scale in our view”, analyst Peter Spengler of DZ bank said.
“We were not convinced about that the merger would be beneficial for Linde shareholders”, he wrote in a note.
The companies sell gases used in a wide range of applications including manufacturing, food processing and the oil and gas industry.
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Munich-based Linde supplies gases to hospitals and patients with respiratory disorders in North America, as well as industrial gases worldwide, while Danbury, Connecticut-based Praxair focuses on industrial on-site production.
