COULD Linde, a German producer of industrial gases, have clinched a takeover of BOC, its bigger British rival, for around €12 billion ($14.4 billion) without the help of Deutschland AG? That is the name commonly applied to the cosy meshing of finance and industry that for decades gave corporate Germany its legendary strength.

Three big German financial institutions, which are simultaneously Linde's main shareholders, and two other banks, will lend more than €15 billion to bridge the BOC takeover. It seems like a reversion to type in Germany, which has lately become more the hunting ground of private equity and other creative forms of finance.

But the story is more complicated than that. Deutsche Bank, Commerzbank and Allianz (which owns Dresdner Bank) together own 32% of Linde. All three institutions have been steadily selling their industrial holdings since 2001 when capital gains tax became more favourable. But they hung on to Linde, mainly because the complex conglomerate, with refrigerators, forklift trucks and gas-making in its portfolio, needed restructuring.

Wolfgang Reitzle, Linde's chief executive since 2003, sold the fridges, bought AGA, a Swedish gas specialist, and steered the firm towards becoming a “pure gas play”. BOC and Linde had been talking for years, they even have a joint venture in America, but until last year the takeover could easily have been the other way round. At one point in 2003 Linde had a market capitalisation of a mere €2.7 billion. Today it is worth €8.6 billion.

But buying BOC still requires an ambitious piece of financing. Helpfully, financing of high-grade corporate debt is cheap at the moment. And selling Linde's forklifts division at a later date could raise €4 billion. BOC rejected Linde's first approach in January, but accepted an improved offer that includes making good BOC's £500m ($870m) pension deficit.

The deal seems to make sense. The two companies fit together with almost no overlap, except in the United States, where they will merge headquarters, and in Poland. Linde is strong in continental Europe, BOC strong in Britain, America and Asia. The two firms, which have had difficulty serving their biggest customers at all points of the globe, will find it easier now they are in tandem. Although the merger is subject to antitrust scrutiny, few disposals are expected.

Linde will emerge from the deal with lots of debt. But its cashflow and the disposal of its materials-handling business should reduce that quickly, says Mr Reitzle. There remains the question of Linde's shareholder structure. The big three banks, which are both lenders and shareholders, and are represented on the supervisory board, will have the classical conflict of interest seen in the old Deutschland AG. Since their declared intention has been to sell their industrial stakes, they should do so sooner rather than later.