Linde-Praxair Deal Still Faces Homegrown Problems
Wolfgang Reitzle, former CEO and current supervisory board chairman of German gases and engineering group, has told German news media he is prepared to use his double vote to seal approval of the planned merger with US rival Praxair at a board meeting ahead of the annual general meeting scheduled for May 10.
Linde executives Reitzle and Aldo Belloni, currently serving as CEO, reportedly find it essential to have the deal approved before the agm as a sign of good will toward the merger partner. Under German law, management and labor representatives have equal representation on corporate supervisory boards but the chairman can cast the deciding vote. A board meeting without a vote was scheduled for Apr. 6.
Opposition from labor members of the company’s supervisory board nearly scuppered the agreement when it was first proposed last year but after initial concessions were made to the workforce negotiations were resumed and a non-binding merger pact signed just before the end of 2016.
In the meantime, opposition from the workforce has flared up again. German trade union representatives are said to have fresh doubts about the merger’s chances for success, and Linde’s European works council has even called it “a demolition that will destroy Linde’s brand essence.”
Belloni has reportedly assured workers’ representatives that savings realized in the merger that forecasts synergies of around $ 1 billion would not come at workers’ expense. In a letter to staff leaked to the news agencies, however, the company’s European works council vowed to “vigorously oppose” the merger and vote against it.
The council said it feared a fusion with Praxair would result in “significant job losses” in Europe, as the combined company will be run from headquarters in the US. A holding is planned to be domiciled in Europe, with Dublin believed to be the current favorite. Apart from this, the workers’ representatives have said there are many open questions that management has not sufficiently answered.
