German industrial gases maker Linde AG has agreed to sell its South India business to Japan’s Air Water Inc. (AWI) as part of a deal to complete its global merger with US-based Praxair Inc.
AWI, through unit Air Water India Pvt. Ltd, has signed a binding term sheet to acquire the South India business of Linde India Ltd for Rs 1,380 crore ($194 million) in cash, the companies said in separate statements. The business includes the manufacturing, storage, transport and sale of oxygen, nitrogen and argon.
Linde and Praxair had agreed to combine last year in an $86-billion deal, but have been selling some assets to get anti-trust approval in some countries. In September last year, the Competition Commission of India had approved the local leg of the global merger but on the condition that both companies sell some of their businesses in the country.
Last year, Linde AG and Praxair Inc incorporated an entity called Linde Plc in Ireland for their global merger. Linde Plc is now the holding company of both the entities.
The deal for Linde’s south India business comes a month after AWI bought the industrial gas business in eastern India from Praxair for Rs 1,525 crore.
AWI, which was established in 1929, entered India in 2013 with the acquisition of Ellenbarrie Industrial Gases Ltd and set up the local unit the following year. The company makes and sells industrial gases as well as chemical, medical and energy-related products.
The acquisition of Linde’s South India business will help AWI take over liquefied gas production and supply facilities and customers in the region. AWI aims to further grow its business outside Japan, it said.
The transaction is awaiting approval from the CCI and shareholders of Mumbai-listed Linde India.
Shares of Linde India ended 6.18% higher at Rs 514.45 apiece on the BSE on Thursday, outpacing the 1% rise in the benchmark Sensex.
Linde India, formerly BOC India Ltd, became part of the Linde group following the acquisition of BOC Group plc, UK by the German company in 2006.
Linde India is primarily active in industrial gases, medical gases, speciality gases and related engineering and services sectors. The company reported revenue of Rs 498.21 crore in the April-June quarter as compared with Rs 549.6 crore a year earlier. Net profit rose to Rs 20.16 crore from Rs 5.25 crore.