| ITEM 2.01 | Completion of Acquisition or Disposition of Assets. |
On March 1, 2019, Linde Aktiengesellschaft (“Linde AG”), a stock corporation incorporated under the laws of Germany and an indirect subsidiary of Linde plc (the “Company”), completed the sale of the majority of its industrial gases business in North America and certain industrial gases business activities in South America to a consortium comprising companies of the German industrial gases manufacturer Messer Group and CVC Capital Partners Fund VII, pursuant to a Sale and Purchase Agreement, dated July 16, 2018, as amended on September 22, 2018, October 19, 2018 and February 20, 2019, by and among the Company, Linde AG, Praxair, Inc., Messer Group and CVC Capital Partners Fund VII (the “SPA”). Messer Group and CVC Capital Partners Fund VII paid $2.97 billion in cash consideration after purchase price adjustments for certain items relating to assets and liabilities of the sold businesses.
The SPA was entered into as part of the commitments in connection with the merger control review by the U.S. Federal Trade Commission (the “FTC”) of the previously completed combination of the businesses of Praxair, Inc. and Linde AG under the Company (the “Business Combination”).
Under the SPA, the Company had given an independent guarantee to MG Industries GmbH, a purchaser entity that is part of the Messer Group, as of the completion of the Business Combination for the full, due and timely performance of any obligation of Linde AG and Praxair, Inc. under the SPA. The SPA contains representations, warranties and covenants that can be considered customary for a transaction of this nature.
For further information about the SPA, refer to the Company’s Quarterly Report on Form10-Q, filed with the Securities and Exchange Commission (the “SEC”) on November 9, 2018. The description of the SPA contained herein does not purport to be complete and is qualified in its entirety by reference to the SPA, as amended, a copy of which is incorporated herein by reference to Exhibits 2.1, 2.2, 2.3 and 2.4 hereto.
The Company determined that Linde AG’s sale under the SPA of the majority of its industrial gases business in North America and certain industrial gases business activities in South America was significant under the criteria of SEC RegulationS-X Rule1-02(w). While the divestitures also included Praxair, Inc.’s business in Chile, this component of the transaction was not material (assets of approximately $18 million). The Company further determined that pro forma combined financial information giving effect to the transactions contemplated by the SPA was not required because the divested businesses described above were not a component of the Company as of September 30, 2018, the Company’s most recent reporting date. Accordingly, the previously reported financial information for that period does not include the Linde AG divested businesses as it represented a period prior to the Business Combination.
The Business Combination has been accounted for using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations”, with Praxair, Inc. representing the accounting acquirer. As such, the historical information to be reported in the Company’s upcoming report on Form10-K for the year ended December 31, 2018 (the “2018 Form10-K”) for periods prior to the consummation of the Business Combination will represent the historical Praxair, Inc. financial position and results of operations. As the results of operations and financial position of the Company prior to the consummation of the Business Combination represent Praxair, Inc. historical financial information that did not include the divested Linde AG businesses, unaudited pro forma combined financial information giving effect to the Linde AG divestitures is not filed with this Current Report on Form8-K.
The divested businesses of Linde AG will be presented as discontinued operations in the 2018 Form10-K, in accordance with FASB ASC205-20, “Discontinued Operations”, as these businesses met the criteria forheld-for-sale treatment upon consummation of the Business Combination. As disclosed in the Company’s Form12b-25, filed with the SEC on March 1, 2019, the Company intends to file the 2018Form 10-K no later than by March 18, 2019. As of the date of this Current Report on Form8-K, both the Company’s and Praxair, Inc.’s most recent fiscal period reported under the Securities Exchange Act of 1934, as amended, is the period ended September 30, 2018.
As part of the Company’s, Praxair, Inc.’s and Linde AG’s further commitments in connection with the merger control review by the FTC, Linde AG divested additional assets within the Americas for aggregate net proceeds of $531 million (i) to MathesonTri-Gas, Inc., five of Linde AG’s HyCO facilities outside the Gulf Coast region, along with Linde AG’s hydrogen pipeline in the Gulf Coast, intellectual property, customer contracts, and other assets, (ii) to Celanese Corporation, Linde AG’s Clear Lake, Texas plant, and (iii) to LyondellBasell Industries N.V., Linde AG’s La Porte, Texas plant.
