The planned withdrawal of the Dax heavyweight Linde will significantly weaken the financial center of Frankfurt.

"It will be a big loss," said Markus Mayer, head of equity research at Baader Bank.

Linde announced on Monday evening that it would propose that shareholders withdraw from the Frankfurt Stock Exchange.

Archibald Preuschat

Editor in Business

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Tillman Neuscheler

Editor in Business.

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The company, which emerged in 2018 from the merger of the traditional German group and the US company Praxair, is currently listed in both Frankfurt and New York.

The double listing in New York and Frankfurt has a negative impact on Linde's valuation, explained CEO Sanjiv Lamba.

Mayer, who also observes the chemical sector at Baader Bank, can understand this: "Depending on the phase in the cycle, the valuation of chemical stocks in the USA is 10 to 20 percent higher.

Even a gas shortage in Europe would have put less strain on the Linde share if it had only been listed in the USA.”

In addition, there is the problem of the maximum limit for the Dax weighting.

In the case of the Linde paper, this is 10 percent, but it should be higher, based on the market capitalization of around 145 billion euros, says Christian Jasperneite, chief strategist at MMWarburg.

“As a result, index funds have to sell the stock every day that Linde rises faster than the overall market in order to track the index correctly.

Of course, that also depresses the price.” The Warburg chief strategist also considers this to be a “design error” in the leading German stock exchange barometer.

"The increase in the Dax from 30 to 40 companies only helped for a few months," agrees John Roberts, an analyst at Credit Suisse, especially as Deutsche Börse opposed raising the weighting cap to 15 percent.

The reaction of Deutsche Börse is poor: "We have taken note of the statement by Linde plc regarding a possible delisting from the Frankfurt Stock Exchange," said a spokesman when asked.

But perhaps the “new Linde” was also unfamiliar with the rules that apply in this country.

The group, which is one of the 70 most valuable companies in the world, relocated its headquarters from Munich to Dublin after the merger with Praxair.

After merging with American rival Praxair in 2018, Linde has adapted to the lavish American salary habits.

In his last year at the helm of Linde, for example, long-standing CEO Steve Angel received total remuneration of around 57 million euros, including pension benefits.

This made him the top earner in the Dax.

The Linde general meetings, on the other hand, have attracted attention in recent years primarily because of their brevity.

While the shareholders' meetings of other Dax companies often last hours,

Linde needed just 24 minutes for its virtual general meeting last year, which annoyed shareholder protectors.

"Since the takeover of Praxair, Linde is no longer a German company," says Daniela Bergdolt, state manager of DSW in Bavaria.

Viewed from a distance, the intended withdrawal from Linde is also “a catastrophe for Germany as a business location”.

The withdrawal is a wake-up call for politicians: they urgently need to make the German capital market more attractive.

However, the intended withdrawal from Linde is also “a catastrophe for Germany as a business location”.

The withdrawal is a wake-up call for politicians: they urgently need to make the German capital market more attractive.

However, the intended withdrawal from Linde is also “a catastrophe for Germany as a business location”.

The withdrawal is a wake-up call for politicians: they urgently need to make the German capital market more attractive.

The car group Porsche, set as the successor to the Dax, has made a perfect IPO, but its market value does not come close to Linde.

The cards are likely to be reshuffled: that could also be an opportunity for Commerzbank or Rheinmetall.