Praxair Inc. agreed to sell a majority of its European assets to Japan's Taiyo Nippon Sanso Corp. for an estimated €5 billion in cash in a bid to win regulatory approval for its planned merger with Germany's Linde AG.

The assets to be sold include Praxair's industrial gases businesses in Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and the U.K., and include approximately 2,500 employees. The businesses to be divested generated annual sales of about €1.3 billion in 2017.

Taiyo Nippon said it will fund the acquisition through cash on hand, and by borrowing from financial institutions, issuing corporate bonds, and hybrid financing. The company does not plan to finance the deal through equity financing.

The sale is conditioned on the outcome of the proposed megamerger of Praxair and Linde, and is part of efforts to meet the demands of the European Commission regarding the said merger.

Credit Suisse Securities acted as exclusive financial advisers to Praxair, while McDermott Will & Emery UK LLP acted as legal advisers. Mizuho Securities acted as primary financial advisers to Taiyo Nippon, while Greenberg Traurig LLP served as legal advisers.

The all-stock merger agreement signed by Praxair and Linde in June 2017 would create Linde PLC, which is estimated to have a combined current market value of more than $70 billion and pro forma revenues of about $29 billion. The proposed merger already received clearance in Mexico and in the U.S. and is expected to be completed in the second half of 2018.