FRANKFURT German industrial gases group Linde (LING.DE) and U.S. peer Praxair (PX.N) have reached a deal in principle on details of their proposed $70 billion merger, Linde said on Wednesday.
The all-share merger of equals, intended to create a market leader that will overtake France's Air Liquide (AIRP.PA), had fallen behind schedule due to complex talks over a Business Combination Agreement formalizing the deal.
The agreement still needs the approval of Praxair's board of directors as well as Linde's management and executive boards, Linde said, adding that signing the agreement was no guarantee the deal would be completed.
Labor representatives at Linde fiercely oppose the planned merger, mainly because moving the headquarters outside Germany will dilute their influence, which currently gives them an effective veto over strategic decisions.
The companies have said that the new combined Linde would be run out of Danbury, Connecticut by Praxair's CEO Steve Angel, with Linde supervisory board Chairman Wolfgang Reitzle as chairman. The headquarters of the new holding company will probably be in Ireland.
Investors and workers are equally represented on Linde's supervisory board, which must approve the deal.
Linde's Reitzle told Reuters this month that he would be reluctant but prepared to use his casting vote as chairman in the event of a stalemate with labor representatives.
German weekly WirtschaftsWoche earlier on Wednesday cited sources as saying that Linde's supervisory board would vote on the merger agreement next week.
Shares in Linde were up 4 percent at 172.55 euros by 1449 GMT (10:49 a.m. ET), while Praxair was 2.5 percent higher at $133.18.
(Reporting by Maria Sheahan; Editing by Arno Schuetze and Elaine Hardcastle)