Linde decides to leave the Frankfurt Stock Exchange
Linde’s traditional Dax group will only be part of the index for a few more weeks. As the company decided on Wednesday at an extraordinary general meeting in Danbury, USA, the listing of shares on the Frankfurt Stock Exchange will end at the beginning of March. Accordingly, 93% of the votes were in favor of withdrawal.
This corresponds to 78 percent of the shares outstanding. This means that one of the basic criteria for continuing to be affiliated with Dax, of which Linde was a founding member in 1988, is no longer met. Meanwhile, Linde has risen to become a Dax heavyweight with a market value of $149 billion. The weight must be regularly set at 10 percent, which is the maximum value that Deutsche Boerse provides for its index.
A few German shareholders regretted Linde’s move. “We voted against the delisting,” said Ingo Spisch, head of sustainability and corporate governance at fund firm Deca. When it acquired Praxair, Linde ruled out the move. Lifting from the list is a disappointment.
This shows that Linde was ultimately acquired by Praxair and not the other way around. It was a backdoor takeover. Delisting also has disadvantages for some of our clients, who can no longer invest in Linde shares. Money firm Union Investment also announced that it would vote against the move.
According to the latest information from the consulting firm EY, only 5 percent of Linde’s shares are owned by German shareholders. At least 56 percent are American owned.
Linde proposed the move to end the hassle of dual listings in New York and Frankfurt associated with US GAAP, International Financial Reporting Standards (IFRS) and two regulatory regimes, the Securities and Exchange Commission in America and Baffin in Germany.
In the October presentation, with which Linde explained his move, reference was also made to weighting restrictions in the DAX, which has repeatedly led to stock selling by index investors.
Linde’s headquarters are already in Ireland
The delisting should take place in Frankfurt on or around March 1, Linde announced. Index investors will have to completely reduce their holdings in Linde shares by then. Linde’s stake in Dax will drop to zero from one day to the next. There are currently about 15 billion euros in Dax funds.
Ten percent of Linde is equivalent to 1.5 billion euros. There are also funds that focus on investing in German stocks. Those would also have to sell Linde shares.
The withdrawal from Linde is a major setback for Germany as a financial centre. After that, Germany was no longer represented in the list of the 100 most valuable companies in the world, in contrast to Denmark, the Netherlands and, of course, France, Switzerland and Great Britain.
Linde’s headquarters has already been moved to Ireland. The first time a company in Deutsche Börse’s selection index decided to delist was when Rocket Internet pulled out of the stock exchange in 2020, at the time from S-Dax.
Removed from the index on the last trading day in Frankfurt. It should also be handled accordingly in Linde. According to the current situation, Rheinmetall will transfer to Dax.
If Commerzbank submits annual financial statements with earnings for 2022 by the time it is delisted, it will also meet Dax criteria and will be included in Dax due to its stock market appreciation.
Commerzbank intends to present its annual balance sheet on February 16. In the ranking list at the end of February, which will be published on March 3, it will be classified as eligible Dax again for the first time.