German gases and engineering group Linde has moved a step closer to a mega merger with US rival Praxair. As expected, the Dec. 7 meeting of the supervisory board dealt with Praxair’s latest proposal to resume talks, and all members of the board – including the initially skeptical labor representatives – backed the proposal.

The board also accepted the offer of CEO Wolfgang Büchele to step down with immediate effect. Taking over on Dec. 8 for a two-year term due to conclude on Dec.31, 2018 is former managing board member Aldo Belloni.

The 66-year-old Milan, Italy, native who retired at the end of 2014 can look back on a long career with Linde, which began in 1980 and ended with managing board responsibility for the engineering divsion and the EMEA arm of the industrial gases division.

Büchele said his resignation was “in the best interest of the company”, and would assure continuity. “I am very pleased that, with the resumption of the merger talks, Linde's leading global role is close at hand," he commented.

The CEO announced in mid-September he would not extend his contract beyond April 2017, in part drawing consequences from the breakdown of the Praxair talks. The turbulence surrounding the talks had already cost former CFO Georg Denoke his job.

Reitzle said the board had “every confidence that Belloni “will apply his great expertise to help shape the next chapter of our company history in our interest." The 66-year-old is widely connected internationally, especially in the Middle East, which is especially crucial to its engineering division’s activity. He is also believed to enjoy the support of the supervisory board’s labor representatives, which would ease the transition process.

Some German reports said the board’s labor-appointed members came around after Reitzle expressed concern that rebuffing Praxair might trigger a hostile takeover offer. The former Linde chief executive has experience in how this might play out, having initially made a hostile takeover bid for rival British gases producer BOC, which later agreed to be bought.

Linde is believed to have ended the talks with Praxair earlier this year in part because the labor representatives were unhappy with a plan to locate corporate headquarters of the new German-American gases player to the US.

To sweeten the pill, it has been speculated that Linde will resume the talks with the intention of preserving more of its current structure. This could mean that important functions and board seats would remain in Munich, and Reitze would keep the job of supervisory board chair. Ultimately, Praxair CEO Steve Angel would become CEO of the new Linde.

Other details offered by analysts, news agencies and business journals suggest that a 50:50 merger and dual listings on the New York and Frankfurt stock exchanges could be agreed by the end of 2016. The merged company would most likely choose the name Linde and favor London as its corporate headquarters, although a location in tax-friendly countries such as The Netherlands and Ireland is said to be under discussion.

Linde and Praxair are roughly equal in enterprise value, Linde with a market capitalization of around $30 billion, Praxair with $34 billion. Both companies have felt pressured by the takeover of US-based Airgas by France’s Air Liquide.

The French-American deal that concluded in May returned the Air Liquide to the industry’s number one slot it had lost to Linde following the German group’s 2006 takeover of BOC. A merger of Linde and Praxair under the name Linde would catapult the German group to the top of the heap again.