Linde wants to leave DAX: A heavyweight is leaving

The DAX is threatened with the loss of Linde shares. Today, the most valuable company on the German stock market decides whether it only wants to be listed on the New York Stock Exchange in the future.

It wasn’t that long ago that Linde and the American industrial gases group Praxair went together. It should be a “merger of equals”. But there is hardly any sign of that. “When you talk to Linde, they actually feel more like a Praxair,” says Hendrik Leber from the investment company Acatis. “It still has a German name on it, but they basically feel like an American company.”

Betrayal of the DAX?

Now the next step: Linde wants to withdraw from the Frankfurt Stock Exchange. The company’s shares will only be traded in New York in the future. That would be a heavy blow for the Frankfurt financial center. Some fund companies even suspect betrayal, talk about the bleeding out of the top stock exchange league in Germany. After all, Linde is not just any company, but the most valuable group on the German stock market, the heavyweight in the DAX since the German stock index existed – because Linde has been there from the start.

A departure from Frankfurt would initially have very practical consequences for the German-American industrial gases group. Because being listed on two stock exchanges is expensive. The bureaucracy is high. And at the end of the day you have to think about where the main trading in the shares takes place, says Chris Oliver Schickentanz from Capitell AG. In the case of Linde, the answer is clear: “The USA is the largest financial center in the world, and many of Linde’s shareholders also come from the USA.” So it’s a natural choice.

Other requirements

And there’s something else that shouldn’t be underestimated: In the USA, there are completely different conditions for companies – and not just in terms of investors’ willingness to take risks. Energy costs are significantly lower there. There are tax breaks. The bureaucracy is different. The Americans make no secret of it either: They want to attract foreign companies to the country in a targeted manner. “The Inflation Reduction Act, that’s the big stimulus package that the Biden administration has brought to life, could of course also affect Linde in terms of business policy and support and help accordingly,” explains Schickendanz.

And Linde has ambitious plans: The industrial gases group wants to break new ground in the production, processing, storage and distribution of hydrogen. This is much easier to implement in the USA than in Europe or even in Germany. Other large corporations such as Bayer or German car manufacturers are also moving at least part of their production abroad. Jörg Krämer, the chief economist at Commerzbank, has been observing this for a long time. “The talk of deindustrialization is not just talk,” he warns.

A wake up call?

Linde’s plans to leave the Frankfurt Stock Exchange should make people think, says Joachim Schallmayer from DekaBank. In his opinion, exactly the opposite should happen: “We need more companies that are actually looking for the capital market. This applies not only to large flagship companies like a Linde, but also to small and medium-sized companies,” says Schallmayer. “We have a completely different shareholder structure, a different awareness in other countries.” Seen in this way, Linde’s departure could be a wake-up call for the capital markets in Germany.