Business Combinations and Divestitures

12 Months Ended

Dec. 31, 2021

Merger of Praxair, Inc. and Linde AG

On October 31, 2018 Praxair and Linde AG combined their respective businesses through an all-stock transaction and became subsidiaries of the company.

Linde AG Merger-Related Divestitures - Primarily Americas Industrial Gases Business

As a condition of the U.S. regulatory approval of the merger, Linde AG agreed to sell the majority of its industrial gases business in the Americas, as described below:

•The Linde AG Americas Sales and Purchase Agreement, dated July 16, 2018, as and further amended on September 22, 2018, October 19, 2018, and February 20, 2019 whereby Linde AG and Praxair, Inc. entered into an agreement with a consortium comprising companies of the German industrial gases manufacturer Messer Group and CVC Capital Partners Fund VII to sell the majority of Linde AG’s industrial gases business in North America and certain industrial gases business activities of Linde AG's in South America for $2.9 billion in cash consideration after purchase price adjustments for certain items relating to assets and liabilities of the sold businesses. In addition, divestitures include $0.5 billion of proceeds for incremental plant sales within the Americas under other agreements. These transactions were completed on March 1, 2019.

•On April 30, 2019, Linde completed the sale of select assets of Linde South Korea with the sale price of $1.2 billion to IMM Private Equity Inc., to satisfy requirements of the Korea Fair Trade Commission. The assets divested include bulk and on-site business in Giheung, Pohang and Seosan sites as well as oxygen and nitrogen on-site generators.

•On December 16, 2019, Linde completed the sale of select assets of Linde India with a sale price of $193 million.

•In March 2020, Linde completed the sale of select assets of Linde China with a sale price of $98 million.

Discontinued Operations

Only the sales of the Linde AG merger-related divestitures meet the criteria for discontinued operations, Praxair merger-related divestitures do not qualify as discontinued operations. As such, operations related to the Linde AG merger-related divestitures are included within Income from discontinued operations, net of tax for periods subsequent to the merger, as summarized below:


Millions of dollars	2021		2020		2019
Net sales	$	5	$	7	$	449
Cost of sales	1		3		251
Other operating costs	1		1		43
Operating profit	$	3	$	3	$	155
Income from equity investments	2		1		8
Income taxes	—		—		54
Income from discontinued operations, net of tax	$	5	$	4	$	109
Noncontrolling interests	—		—		(7)
Income from continuing operations, net of tax and noncontrolling interests	$	5	$	4	$	102

For the years ended December 31, 2021, 2020 and 2019 there were no material amounts of capital expenditures or significant operating or investing non-cash items related to discontinued operations.

Non-Merger Related Acquisitions

Non-merger related acquisitions of $88 million, $68 million and $225 million for the years ended December 31, 2021, 2020 and 2019, respectively, were primarily related to the Americas and are not material, individually or in the aggregate.

Non-Merger Related Divestitures

Effective January 1, 2021, Linde deconsolidated a joint venture with operations in APAC, due to the expiration of certain contractual rights that the parties mutually agreed not to renew. From the effective date, the joint venture is reflected as an equity investment on Linde's consolidated balance sheet with the corresponding results reflected in income from equity investments on the consolidated statement of income.

The fair value of the joint venture at January 1, 2021 was determined using a discounted cash flow model and approximated the carrying amount of its net assets. The net carrying value of $852 million was mainly comprised of assets of approximately $1.9 billion (primarily Other intangibles and Property plant and equipment - net), net of liabilities of approximately $1.0 billion. Upon deconsolidation an equity investment was recorded representing Linde's share of the joint venture's net assets. The deconsolidation resulted in a gain of $52 million recorded within cost reduction programs and other charges (see Note 3) related to the release of the CTA balance recorded within AOCI. The company did not receive any consideration, cash or otherwise, as part of the deconsolidation.

The joint venture contributed sales of approximately $600 million in 2020. Future earnings per share will not be affected as the ownership percent remains the same.