Industrial gases giants Linde and Praxair are in talks to try to salvage their $83 billion merger after U.S. competition regulators demanded they sell assets that generate more than $4.3 billion in sales.
Linde said on Wednesday the divestments were expected to reach a level that would allow either party to abandon the deal, although the German company added that talks continued with both Praxair and regulators.
Analysts said they still expected the deal to go ahead, though they cautioned the asset sales could make the deal less attractive and/or make synergy targets harder to achieve.
Linde and U.S.-based Praxair agreed an all-share merger in principle in December 2016, aiming to create a global leader in gas distribution ahead of France's Air Liquide, which had also bulked up with the takeover of rival Airgas.
The companies agreed that if antitrust regulators demanded the disposal of businesses with more than 3.7 billion euros ($4.3 billion) in sales, or 1.1 billion euros in earnings before interest, taxes, depreciation and amortisation (EBITDA), either party could withdraw without penalty.
Linde said on Wednesday it expected the revenue threshold for divestment commitments to be exceeded, but didn't say by how much and did not mention the EBITDA hurdle. It had previously warned this was very likely to happen.
"Linde and Praxair remain in constructive dialogue with each other and the regulators on how to satisfy their requirements," Linde said.
Earlier this month, the U.S. Federal Trade Commission (FTC) asked for more assets to be sold than previously anticipated and also said it wanted prospective buyers of these assets to meet certain other requirements.
Bids for major U.S. firms have had mixed fortunes recently.
The $63 billion takeover of seeds maker Monsanto by Germany's Bayer, meanwhile, went through after 7.6 billion euros worth of disposals.