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Praxair and Linde merger

por Philip F. Jacobus, CEO | September 14, 2016
In the October issue of HealthCare Business News we're going to talk about the helium market. Two big players in this space, Praxair and Linde, have been in talks for some time about a merger. The new company was expected to be valued at $60 billion. They expected to save more than $1 billion by eliminating redundancy.

This would be a good thing for the industry in general. The price of helium continues to increase. I'm not in favor of mergers that eliminate competition but I understand the extent of the investment that has to happen to reliably produce helium and transport it.

There would still be other players in the market but at least this new merged company would have more money to spend on development and production.

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Sounds like a good idea, don't you think?

And yet at the last minute the merger hit a snag.

I was told in a phone call the financial director of Linde is balking at the transaction and has derailed the merger. It's my understanding that one of the positions that would be eliminated when the new company was headquartered in the United States would be his position.

I suspect Linde will give him some sort of golden parachute so the merger can continue, but it still seems crazy to me.

Reminds me of the situation where Roger Ailes from Fox News received a $40 million parting gift while Gretchen Carlson only received $20 million and she was the wronged party. You might say that $20 million is a lot of money and I would agree with you. My point is that when people do the wrong thing I do not think that they should be rewarded.

I believe that investment is needed for helium's future, maybe even the great reserves discovered in Africa. Anybody that stands in the way of our future I think is wrong.

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About Phil Jacobus

Phil Jacobus has been involved in health care since 1977, when he visited China to sell equipment. He has done business in 35 countries and still travels extensively. Phil is active in charity, helps rural clinics and always tries to help DOTmed users when he can.

Phil is a member of AHRA, HFMA, AAMI and the Cryogenic Society of America. He has contributed to a number of magazines and journals and has addressed trade groups.

Phil's proudest achievement is that he has been happily married to his wife Barbara since 1989, who helped him found DOTmed in 1998.

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Burke Whitney

Great Column!

September 20, 2016 01:41

Hello Phil,

I hope you are well. Just wanted to drop you a note to let you know how much I enjoy reading "The Jacobus Report" every week. The information and commentary brings a lot of beneficial perspective into the mix of my immediate and long-term thinking and planning.

All the best to you Sir,

Burke Whitney

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Gary Provenzano

It's called a duopoly

October 13, 2016 06:21

So how many companies will be left? Two?

I understand Air Liquide also acquired Airgas?

Please tell me how a duopoly will add to competitive pricing?

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