FRANKFURT (AFP) – Germany’s prestigious DAX index lost its most valuable company on Wednesday when industrial gas maker Linde announced its decision to list exclusively on the New York Stock Exchange.
Linde’s departure puts another dent in Frankfurt’s reputation as a global financial centre, already damaged by the accounting fraud scandal that brought down payments firm Wirecard two years ago.
Linde said shareholders had voted around 93 per cent in favour of delisting from Frankfurt.
The company aims to quit the German stock exchange around March 1.
“Linde shareholders will automatically receive one share of the new holding company, to be listed on the New York Stock Exchange in exchange for each share of Linde plc they own,” it said in a statement.
Linde – which merged with United States (US) rival Praxair in 2018 and has been dual listed in Germany and the US since – announced in October that it planned to say goodbye to Frankfurt.
Linde said it been “negatively impacted” by its dual listing.
European restrictions had “constrained our stock valuation”, CEO Sanjiv Lamba said at the time.
Specifically, the group has been hampered by DAX rules capping a company’s weight at 10 per cent of the total value of all the index members.
Linde – valued at around EUR150 billion (USD160 billion) – regularly breached that threshold, triggering an automatic sale of shares.
It is likely to be replaced on the DAX by arms manufacturer Rheinmetall, according to German media.
Linde’s exit marks the latest shake-up for the blue-chip DAX, which has undergone a series of changes in recent years.
The index grew from 30 to 40 members in 2021 in a bid to diversify and attract younger firms including tech companies.
The DAX remains heavily dominated however by traditional players such as carmakers and industrial companies.
As part of the revamp, stock market operator Deutsche Boerse also tightened the rules for joining the DAX in the wake of the Wirecard scandal that stunned Germany.
Wirecard imploded in 2020 after admitting to a EUR1.9-billion hole in its accounts, leading to the arrests of several executives on fraud charges.
Wirecard filed for insolvency and its share price plummeted before it was booted off the index, becoming the first DAX-listed company to fail.
