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Praxair Seals European Asset Sale Deal With Taiyo Nippon

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Praxair, Inc. has agreed to divest majority of its European businesses to Taiyo Nippon Sanso Corporation for 5 billion euros (around $5.83 billion) in cash. The agreement, which is subject to the successful consummation of the Praxair-Linde merger and other regulatory approvals, will help to cope with regulatory concerns related to the merger in the European Economic Area.

Notably, Praxair’s European assets on sale include industrial gases businesses in Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom, which generated annual sales of around 1.3 billion euros in 2017. With this transaction, Taiyo Nippon will enter the European market and continue to serve the needs of Praxair’s customers in the region.

However, Praxair will continue to own, operate and maintain these businesses until the closing of the merger and this European divestiture transaction. Also, the company is working on its business combination deal with Linde AG and received unconditional antitrust clearance in Mexico recently.

In June 2017, Praxair signed an agreement to merge with Linde AG. This all-stock transaction is expected to close in the second half of 2018. The resultant company is believed to be a leading industrial gas company with strong international presence, a large customer base and solid financial flexibility.

Share Price Performance

Shares of Praxair have outperformed its industry in a year’s time. The stock has gained around 19% compared with the industry’s 6% rise.

Zacks Rank & Key Picks

Praxair carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Chemours Company (The) (CC - Free Report) , Methanex Corporation (MEOH - Free Report) and Celanese Corporation (CE - Free Report) . While Chemours Company and Methanex sport a Zacks Rank #1 (Strong Buy), Celanese has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours Company has a long-term earnings growth rate of 15.5%. Its shares have rallied 12% over the past year.

Methanex has a long-term earnings growth rate of 15%. The company’s shares have appreciated 66% in the past year.

Celanese has a long-term earnings growth rate of 8.9%. The stock has gained 17% in a year’s time.

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