Structuring New Global Partnerships

Tony Pepper’s thirty-two years of experience in corporate law, governance, and public company compliance has led him to a key role in the $90 billion merger between the US company Praxair and the German company Linde AG

Photo: Sandra Costello

In his corporate legal career, Tony Pepper has become an expert in navigating extraordinarily complex transactions and challenges, particularly in the midst of evolving, profound changes in laws and regulations. That expertise became increasingly valuable in his career, particularly since the explosion of corporate governance and related reforms that began with the Sarbanes-Oxley Act of 2002. “There have been huge catalysts for additional regulation and oversight, including the response to corporate scandals such as WorldCom and Enron around 2001 and the 2008 financial crisis. These events led to far more comprehensive and complex corporate governance and public company laws and regulations,” Pepper says. “In order to do the job effectively, you have to be an expert in key legal disciplines such as securities laws and corporate governance, all of which are combined and are inextricably linked.”

Pepper learned that early on, as those reforms were being enacted. When he joined The Travelers Insurance Company in 2002 as corporate legal counsel, he was tasked with structuring its public company compliance and corporate governance functions in the multibillion-dollar spinoff of Travelers from Citigroup. In addition to handling the many challenges of structuring corporate governance and board practices—expertise he’d developed previously in a similar role at The Hartford Financial Services Company, which was spunoff from ITT Corporation in 1995—Pepper needed to build an entire new  compliance structure for Travelers during a time when, as he puts it, “all of the rules were being rewritten.”

“There was a huge challenge at that time to structure compliance and corporate governance at Travelers as a new, large public company because numerous legal and corporate governance reforms were occurring as the Citigroup spinoff was occurring in 2002,” says Pepper. That experience taught him how to think fast and dig deep during large, complex corporate transactions, and to build a deep well of knowledge of underlying rules and regulations in order to create a smooth transition even when in the midst of evolving reforms and changing laws.

Tony Pepper Praxair
Tony Pepper, PraxairPhoto: Sandra Costello

This expertise is part of what led Pepper to being recruited to Praxair in 2006, where a senior corporate attorney and assistant secretary was planning to retire, and Pepper was being groomed to assume that role. And this experience has served him well throughout his Praxair tenure, particularly when the Dodd-Frank Act of 2010 was adopted in response to the 2008 financial crisis, which ushered in increasing levels of corporate governance and public company regulation. “In addition to these laws and regulations, even the private sector pressure from large investors and proxy advisory firms for better governance and accountability of boards of directors has ramped up significantly,” Pepper says. And this means that when any changes occur, attention to corporate governance structures and policies becomes even more important.

At Praxair, the legal challenges ramped up in 2016 when Praxair and Linde agreed in principle to a merger of equals. “There were enormous complexities and challenges to the corporate legal and governance structure of the merger of equals between Praxair, as a US public company, and Linde AG, as a German public company,” Pepper says. “Linde PLC, the new public holding company arising from the merger, is incorporated in Ireland with shares of stock listed on the New York Stock Exchange and the Frankfurt Stock Exchange. This resulted in a blend of US and European public company compliance and corporate governance standards. This was a cutting-edge deal with very few structural precedents.”

Pepper was able to take his previous experience with the spinoffs at The Hartford and Travelers, and a 2004 merger of equals between Travelers and the Saint Paul Insurance Company, and apply it to the Praxair-Linde merger, taking on a critical role in formulating and structuring corporate governance and public company compliance. “The challenge was, how do we integrate and make sure that we have a successful governance and board of directors structure that reflects the underlying laws, rules, and governance principles, while at the same time being sensitive to each board’s respective different practices and priorities?” Compliance was particularly important, he adds. “We have to be able to meet the governance standards and expectations of large institutional investors that own our company, and advise the board on key matters and developments,” Pepper says.

Because the new company is incorporated in Ireland but has stock listed in the US and in Germany, Linde PLC is subject to three sets of public company laws, rules and standards: those of Ireland, the US, and the European Union. This structure has created various new legal compliance challenges for which Pepper is providing leadership. While researching and learning about European standards, Pepper worked with a large team of in-house and external lawyers, accountants, and other professionals in preparing and filing extensive disclosure documents with both the US SEC and EU regulators, and also distributing them to shareholders. “I had the pleasure of working with Tony Pepper on the Praxair merger of equals with Linde AG to form a global industrial gases giant,” says Cian McCourt, partner at Arthur Cox. “Tony is a pragmatic and innovative leader with outstanding judgment and considerable experience in corporate governance.”

“In order to do the job effectively, you have to be an expert in key legal disciplines such as securities laws and corporate governance, all of which are combined and are inextricably linked.”

“As a result of Linde PLC’s two stock exchange listings, we became subject to both US and certain EU public company rules,” Pepper says. Pepper led legal integration planning for the Praxair-Linde merger in two principal areas: matters related to the board of directors and corporate governance, and public company compliance (SEC and EU reporting and related compliance). “I had to make sure that there was a proper structure in place so that on day one, as soon as we closed the merger, we would be compliant,” Pepper says.

As board meetings have continued since the closing, he’s worked further to establish best practices, addressing issues related to public company and board compliance, as well as making further filings and disclosures. And as the new company continues to move forward, so will the compliance challenge. “It will remain a challenge because there are many rules and laws that will apply from Europe in addition to the US, and we will have to continue to successfully manage compliance,” Pepper says. “There’s also a learning curve for the directors of Linde PLC because the board is comprised of twelve members: six former Praxair directors and six former Linde directors.”

It is, Pepper says, likely the greatest career challenge that he’s faced so far. But, he adds, it’s an exhilarating one, as Linde PLC now has approximately 80,000 employees worldwide, with a revenue of $27 billion and a stock market capitalization of $90 billion. And he considers himself equipped for the task with both his years of legal and working education, which he furthers as a member of the Society of Corporate Governance. “This is what I always dreamed about, managing the corporate governance and public company compliance of a company of this size and stature,” Pepper says. “I’m excited for what comes next.”

As the global leader in global registry services, Computershare congratulates Tony Pepper and Praxair-Linde on their successful merger. Tony recognized the complexity of this multi-jurisdictional transaction and the global expertise required to meet Linde’s cross-border registry needs. Tony’s partnership, ongoing leadership, and guidance helped make it a success! Learn more about Computershare at