Status: 25.10.2022 8:18 a.m
The German-American industrial gases group Linde wants to withdraw from the Frankfurt Stock Exchange. The company’s titles will only be traded in New York in the future. The DAX would thus lose its most valuable member.
The currently most valuable value in the DAX should probably soon say goodbye to the leading German index. The industrial gases group Linde, which merged with American competitor Praxair in 2018, is planning to withdraw from the Frankfurt Stock Exchange. The shares of the traditional Munich company will only be traded in New York in the future. The company’s board of directors decided last night to propose this to shareholders.
According to Linde management, the double listing in New York and Frankfurt has a negative impact on the valuation, said CEO Sanjiv Lamba. The shareholders should have the last word. So far, Linde shares have been traded on both stock exchanges, but the lion’s share of stock exchange trading takes place in New York.
If Linde were to withdraw, Deutsche Börse would lose a heavyweight and one of the most valuable companies in the leading German index. With a market value of around 145 billion euros, the group is the heaviest value in the DAX. It is followed at some distance by the software giant SAP with a market value of 107 billion euros and Deutsche Telekom with a market capitalization of 90 billion euros.
Double listing slowed price development
“We are very proud of our rich history and strong presence around the world, including our origins in Germany,” said Samba, who has been managing Linde for a good six months. The double listing has served well, but it has slowed down the price development due to the restrictions in Europe.
Linde regularly exceeds the ten percent cap that Deutsche Börse uses to limit the index weight of an individual DAX stock each time the index is recalculated. As long as the share performs better than the DAX, index funds that track the leading German index have to keep selling Linde shares. Investors had rejected an increase in the cap in June. Such maximum values are only common in European indices; they play no role in the S&P 500 index with its 500 values.
No impact on employees
The official seat of the company since the merger of Linde and Praxair has been in Ireland, the tax domicile and the headquarters of Linde plc are in Woking near London. According to the Executive Board’s plans, the withdrawal from Frankfurt is to be accomplished by the Linde shareholders exchanging their shares for shares in a new holding company in Ireland.
If the exit plans were implemented, a new holding company would be formed. The proposal has no effect on the organizational structure, employees, customers or the presence of Linde, said boss Samba. Germany will “remain an important market for us”.
Shareholders will receive one share in the new holding company for each Linde plc share to be listed on the New York Stock Exchange. The group will then be renamed Linde.