Finally, Cramer delved into a merger on the horizon that he believes could be one of next year’s best combinations: between American industrial gas giant Praxair and German chemicals company Linde.
“First of all, it’s a huge transaction,” Cramer said. “The combination of the American Praxair and the German Linde, which is going to keep Linde’s name, will have nearly $30 billion in sales, and based on where the stocks are currently trading, it could be worth about $70 billion. And it is a match made in heaven.”
The merger would put the newly combined company at the top of its game, as Praxair and Linde currently hold the No. 2 and No. 3 spots in the industrial gases space behind competitor Air Liquide.
“Most importantly, Praxair and Linde have different core competencies, so the hope is that they’ll complement each other,” Cramer said.
Linde’s end markets differ slightly from Praxair’s, and the two do business in different regions of the world. A combination would mean enlarged business and market share, along with $1.2 billion of synergies, according to the companies’ management teams.
“I think it’s worth getting in on this one ahead of time while we wait for the deal to close sometime next year,” Cramer said. “While Praxair’s run up just over 10 percent since the announcement, I think it’s only just begun to rally. I think this combination’s going to be the real deal and you want to be in it.”