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Stock Strategist Industry Reports

Transformative Industrial Gas Merger Takes Shape

The proposed tie-up of Praxair and Linde will result in a clear market leader.

David Silver, CFA, CPA

Aug 25, 2017

Mentioned: Linde AG (LNA) , Linde PLC (LIN) , Air Products & Chemicals Inc (APD)

The proposed merger of two industrial gas giants--wide-moat Praxair (PX) and narrow-moat Linde--would create a clear market leader and is likely to establish the status quo for the competitive landscape for the next decade. We expect a thorough regulatory review will ultimately result in the merger’s approval, albeit with meaningful required divestitures.

Consolidation among industrial gas companies has been popular for the past two decades because it has been successful. Bidding discipline has improved and bottom-line focus has intensified.

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David Silver does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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