Special Report on the Industrial Gases Industry: How Did Linde Transform from Equipment Manufacturing to Industrial Gases?

(III) Acquisitions Expand Geographic Footprint and Boost Market Concentration, Cementing Linde’s Leadership Position Linde consistently pursued mergers and acquisitions to broaden its geographic reach and product portfolio. In the 1930s, to fend off competitors, Linde repeatedly acquired small enterprises to safeguard its market share and actively formed cartels with other large firms. After World War II, the oligopolistic market environment grew increasingly severe; Linde urgently merged with companies such as AGA. The former strategy—acquiring peers—aimed at technological monopolization, while the latter—acquiring complementary businesses—enabled expansion into new markets. These acquisitions and mergers transformed Linde from an export-oriented enterprise into a global market leader. Expropriation and subsequent re-merger led Linde’s acquisition of Praxair—the largest development in the industrial gases industry since the beginning of the 21st century. In 1907, Carl von Linde traveled to the United States to establish Linde Air Products Co., which later became Praxair. During World War I, Linde Air Products was expropriated and merged with four other chemical companies to form part of Union Carbide, resulting in Linde losing control over its subsidiary. In 1992, Praxair was spun off from Union Carbide and listed independently. Several acquisitions over the following years elevated it to become a global industrial gas giant: In 1995, Praxair acquired Carbonic Liquid, entering the carbon dioxide market and securing a full spectrum of gas products. In 2004, Praxair acquired Air Liquide’s German operations, enabling pipeline-based supply to major customers in metallurgy, chemicals, and steel industries, while also serving smaller clients with bulk gases, medical gases, specialty gases, and synthetic gases. In 2013 and 2016, Praxair respectively acquired NuCO₂—a leading U.S. provider of carbonated beverage solutions—and the European CO₂ business of Air Products’ subsidiary Arla International, further expanding its global influence. In 2018, Praxair and Linde reunited after a century. Acquisitions enabled entry into new geographic markets and expansion of international customer bases. Post-war emergence of competitors—including Air Products and Air Liquide—made it difficult for Linde to expand overseas solely through operational advantages. As a major exporter, Linde established footholds in new markets by acquiring local small- and specialty-gas companies abroad. In 2010, Linde acquired 95% of Ceylon Oxygen Limited (COL), Sri Lanka’s leader in medical and industrial gases; COL was also the country’s sole company possessing air separation equipment—this acquisition helped Linde enter the Asian market. In April 2012, Linde acquired parts of Air Products’ businesses in Belgium, France, Portugal, and Spain; in August 2012, it acquired Lincare—a U.S.-based home healthcare gas supplier—becoming North America’s largest home-care gas provider. The acquisition of AGA directly expanded Linde’s presence in Northern Europe, South America, and Central America. AGA shared a development history similar to Linde’s: In 1999, AGA supplied gases for food processing, pharmaceuticals, welding, environmental engineering, chemicals, and electronic component manufacturing. Historically, AGA’s gas business originated in acetylene, later ventured into liquid oxygen, and after 1970 began developing specialty and inert gases. In 1986, AGA acquired a group specializing in carbon dioxide. AGA and Linde were highly complementary: Geographically, AGA held strong positions in regions where Linde’s presence was relatively weak—such as the United States and Latin America; operationally, AGA’s medical gas business complemented Linde’s on-site service offerings; and in terms of gas engineering alone, AGA operated on a larger scale and possessed greater international reach than Linde.

Peter Lynch: Don’t Let These Stocks Enter Your Portfolio

Peter Lynch devotes considerable space to discussing companies suffering from 'diversification deterioration.' In capital markets, 'diversification' is an extremely common and widely emphasized growth strategy among listed companies—but truly successful diversification is rare, with most cases amounting merely to storytelling. 'Diversification deterioration' refers to a category of diversified companies whose excessive acquisition prices and operations beyond their core competencies have led to deteriorating business performance. Lynch observed that roughly every decade, 'diversification deterioration' companies swing like a pendulum between two extremes: one decade sees rampant acquisition-driven diversification deterioration; the next decade witnesses frenzied divestitures and corporate restructuring. Lynch notes that this cycle—repeatedly acquiring, failing, regretting, divesting, then acquiring again, failing again, regretting again, and divesting again—is enthusiastically welcomed by minority shareholders but offers no benefit—and indeed only harm—to the acquiring conglomerates. Regarding 'whisper stocks,' 'suppliers overly dependent on major customers,' and 'companies with flashy names,' Lynch summarizes them concisely: 'Whisper stocks' are those touted quietly—like a woman sharing a secret—as potential 'dark horses' or exceptionally profitable 'blue-chip growth stocks'; 'suppliers overly dependent on major customers' refer to companies selling 25%–50% of their goods to a single client, indicating highly unstable operations; 'companies with flashy names' are those whose names include words like 'premium,' 'principal,' or 'micro,' or use mysterious acronyms—these often trigger instant investor infatuation, yet provide only 'a false sense of security.' Investment Opportunities Also Exist Among 'Diversification Deterioration' Companies Although Peter Lynch considers avoiding the above six categories of stocks the optimal way for ordinary investors to safeguard capital, he simultaneously points out that—with deep research—opportunities do exist. Among diversified companies, Berkshire Hathaway stands out as one of the rare success stories. Originally a textile mill, Berkshire was initially purchased by Buffett with the intention of continuing textile operations. However, the persistent decline in U.S. textile competitiveness gradually squeezed Berkshire’s operations, forcing repeated business cutbacks until it ultimately exited the textile industry entirely. During this exit process, Berkshire concurrently transformed itself via successive acquisitions into a cross-sector conglomerate—owning candy stores, furniture outlets, newspapers, and other businesses or assets—delivering astonishing performance. Lynch states that Berkshire Hathaway essentially operates acquisition as its core business. Beyond this select minority, some 'diversification deterioration' companies also present investment opportunities. Lynch highlights two potential benefits arising from 'diversification deterioration': first, holding shares of acquired companies; second, identifying turnaround investment opportunities among distressed companies forced into restructuring and divestiture due to 'diversification deterioration.' Applying Lynch’s framework to China’s A-share market reveals actual cases where companies first encountered diversification-related distress, then achieved turnarounds by shedding non-core businesses—for instance, Changan Automobile in the automotive sector and Nod Energy in the lithium battery industry.

Carnegie Investment Counsel Acquires 2,257 Shares of Linde PLC

2 days ago

Carnegie Investment Counsel acquired a new stake in Linde PLC worth approximately $1.07 million. Linde reported strong quarterly results with revenue rising 9.3% year-over-year and paid a $1.60 per share dividend.

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