Commission opens in-depth investigation into Praxair and Linde merger
Praxair and Linde are two of the four largest companies active worldwide across the whole supply chains of industrial, medical and speciality gases.
For example, they both supply carbon dioxide, which is widely used in the carbonated drinks industry and oxygen, which has a wide variety of uses from steel production to medical oxygen in hospitals and patient homes. They also supply helium, a gas that is necessary for the proper functioning of Magnetic resonance imaging (MRI) scanners.
The transaction would reduce the number of major players active worldwide and in Europe for the supply of these and many other gases to just three.
Other players in the market only have regional, national or local presence and lack the technical and financial capabilities to compete on an equal footing.
In addition, there is no indication that competition could be fostered by new entrants, due to the very high investment necessary to establish a meaningful position in the market.
At this stage, the Commission is concerned that the proposed transaction would reduce the competitive pressure in markets covering a significant part of the activities of Praxair and Linde.
In particular, the Commission is concerned that there is a risk of price increases due to the increased market power of the merged entity, or the increased likelihood of coordination between the remaining players in the markets.
In particular, the Commission's initial market investigation raised competition concerns for the supply of industrial gases, medical gases (and related services), speciality gases, as well as the supply of helium.
The market investigation confirmed that only the four main players have the engineering capabilities necessary to bid for the largest tonnage projects (i.e. the construction of dedicated gas production units on customer manufacturing sites).
It also confirmed that only they have the necessary access to sources of helium worldwide to be competitive. Customers fear that the reduction of the major players from four to three would significantly deteriorate their ability to obtain critical inputs and products at competitive prices.
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