Dhe traditional Dax group Linde will only be a 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 the shares on the Frankfurt Stock Exchange is to be ended by the beginning of March. Accordingly, 93 percent of the votes cast were for the withdrawal. This corresponded to 78 percent of the outstanding shares. This means that one of the basic criteria is no longer met in order to continue dax to belong to, of which Linde was a founding member in 1988. In the meantime, Linde has even risen to become a heavyweight in the Dax with a market value of $149 billion. The weight has to be capped regularly at 10 percent, the maximum value that Deutsche Börse provides for its index.
The few German shareholders regretted Linde’s move. “We voted against the delisting,” said Ingo Speich, Head of Sustainability and Corporate Governance at the fund company Deka. “When it acquired Praxair, Linde ruled out this step. The delisting is a disappointment. This makes it clear that ultimately Praxair took over Linde and not vice versa. It was a backdoor takeover. The delisting also has disadvantages for some of our customers, who can no longer invest in Linde shares.” Fund company Union Investment had also announced that it would vote against the move.
According to the latest information from the consulting firm EY, however, only 5 percent of Linde shares are held by German shareholders. At least 56 percent is American-owned. Linde had proposed the move to end the hassle of a dual listing in New York and Frankfurt associated with US GAAP and Europe IFRS accounting rules and two regulatory regimes, the SEC in America and the Bafin in Germany. In the presentation in October, with which Linde explained his step, reference was also made to the limitation of the weight in the Dax, which repeatedly led to shares being sold by index investors.
Linde headquarters already in Ireland
The delisting in Frankfurt should take place on or around March 1, as announced by Linde. The index investors will have to completely reduce their holdings in Linde shares by then. The Linde share in the Dax will fall to zero from one day to the next. Around 15 billion euros are currently in Dax funds. Linde’s ten percent is equivalent to 1.5 billion euros. There are also funds with an investment focus on German stocks. These too will have to sell Linde shares.
The withdrawal from Linde is a major setback for Germany as a financial centre. Germany is then no longer represented in the list of the 100 most valuable companies in the world, unlike Denmark, the Netherlands and of course France, Switzerland and Great Britain. Linde’s headquarters have already been relocated to Ireland. That one in a selection index of German Stock Exchange An existing company decided to delist only once when Rocket Internet withdrew from the stock exchange in 2020, at that time from the S-Dax.
The removal from the index took place on the last trading day in Frankfurt. It should also be handled accordingly at Linde. According to the current status, Rheinmetall would move up to the Dax. If Commerzbank has presented annual financial statements with a profit for 2022 by the time the delisting is completed, it would also meet the Dax criteria and would be included in the Dax due to a higher stock market value. Commerzbank intends to present the annual balance sheet on February 16. On the ranking list at the end of February, which will be published on March 3rd, it would then be classified as Dax eligible again for the first time.