Linde confident of Aga and Messer acquisitions

30 August 1999 00:00  [Source: ICB]

As the process of concentration in the industrial gases market continues, Germany's Linde is poised to take over both Sweden's Aga and Hoechst's 66% share in Messer Griesheim.

Linde chairman Gerhard Full said the Aga takeover could be completed in 'one or two months', and the Messer acquisition 'hopefully by the end of this year'.

Taking in both Aga and Messer would boost Linde's share of the international gases market from 5% to nearly 15%, bringing it level with Air Products following its proposed takeover of half of BOC. Gases sales of the Wiesbaden-based group, which also has interests in process plant contracting and industrial refrigeration, would rise from nearly DM3bn ($1.6bn) to almost DM12bn.

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Linde plans to make a cash offer of SKr141 ($17.10)/share for all of Aga. This values the company at SKr30.9bn. The deal is to be financed initially through a bridge loan from Deutsche Bank, followed by an equity increase in a convertible bond issue and long-term loans.

The German group already owns 13% of its Swedish rival's equity, acquired through the stock markets. It also has a binding option to acquire stakes held by three major shareholders, including Swiss investor Martin Ebner. The Swiss industrialist is also a key shareholder of aluminium and packaging group Alusuisse Lonza (Algroup) and was a principal figure in the recent merger manoeuvres in that sector.

Full said combining Linde's gases business with Aga's would create considerable synergies, strengthen competitiveness, propel product development and increase chances for cost saving, but added that noticeable new restructuring costs are not anticipated.

The Stockholm stock exchange criticised Linde's secretive stock buildup.

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