* New threshold gives passive investors more time to tender
* Linde, Praxair still confident of getting 75 pct approval
* One-year deadline for deal to close after end of tender
* Divestitures worth up to 7.5 bln euros next step -sources (Adds details, background)
FRANKFURT, Oct 23 (Reuters) - Industrial gases group Linde has cut the approval threshold and extended a deadline for accepting its $80 billion tie-up with Praxair, while pushing on with plans to get a green light from regulators.
The planned merger between Linde and U.S. group Praxair, agreed in June, will create a global leader in industrial gases to overtake France's Air Liquide with combined revenue of $28.7 billion and 88,000 staff.
To pave the way for the deal, Linde has cut the acceptance threshold to 60 percent from 75 percent of shareholders, and the period of the exchange offer, due to expire on Tuesday, has been extended to Nov. 7, Linde said on Monday.
From late-November, Linde and Praxair will then have 12 months to close the deal, during which they will need to convince regulators that the transaction does not hamper competition.
People close to the matter said the companies were preparing to sell assets with core earnings of 650-750 million euros and enterprise value of about 6.5-7.5 billion ($7.6-$8.8 bln). The assets up for sale have combined sales of more than 2.7 billion euros, the bulk of which is located in the United States.
Industrial gases are usually driven to customers within a 100 to 250-mile radius of production facilities, and regulators therefore examine regional rather than national markets in their reviews.
The sources said Linde and Praxair were planning to send out information packages on the assets to prospective buyers around Christmas, of which assets with 1.5-2 billion euros in sales are based in North America.
European assets - mostly Germany, but also in Spain, Italy and elsewhere - with 700-900 million euros in sales will also be offered. South American assets - mainly Brazil-based - with 500 million in sales are also included, the sources said.
Several private equity groups have started work on potentially snapping up the whole bundle, they said, adding that CVC has tied up with small Linde rival Messer for a potential offer, while Blackstone and Carlyle are preparing bids.
A number of other buyout firms such as Advent, Bain and KKR are also in talks to form consortia, with some also considering tie-ups with large pension funds to join the bidding.
Some of the investors are also participating in the auction of Dutch paint maker Akzo Nobel's 9 billion euro speciality chemicals business. But it is unlikely that both the Linde and the Akzo assets will land in the same hands, the sources said.
Industrial gases groups such as Air Products and Air Liquide will also evaluate any assets that Linde and Praxair would seek to divest, the sources said.
Linde and Praxair declined to comment on the volume and timing of the divestitures, while the potential bidders declined to comment or were not immediately available to comment.
Linde's offer to shareholders to exchange their stock for shares in the merged company reached the 50 percent acceptance threshold on Friday. That paved the way for passive funds, such as exchanged-traded funds replicating Germany's blue chip DAX index, to tender their stock.
Roughly 10 to 13 percent of Linde's shares are held by such funds, which typically tender in such situations and now have more time to do so, people familiar with the matter said.
Linde estimates that retail investors own about 5 to 6 percent of its shares. Chairman Wolfgang Reitzle told Reuters in June that tracking them down would be tough.
The companies still expect to get the merger done in its originally intended form.
"We have confidence in reaching an acceptance level of 75 percent or more at the end of the exchange offer process, which is required for the success of the transaction as it avoids an adverse tax event," Linde said.
Goldman Sachs and Deutsche Bank are advising Linde on the asset sales process, while Credit Suisse is helping Praxair. ($1 = 0.8519 euros) (Reporting by Arno Schuetze; Editing by Maria Sheahan, Alexander Smith, Douglas Busvine and Jane Merriman)