Germany's Linde (LNEGY) has confirmed it is in preliminary merger talks with Praxair (PX) to create the world's largest industrial gas supplier with a combined revenue of about $30 billion. That compares with French rival Air Liquide's €20 billion ($22.5 billion).

"These discussions are ongoing and have not resulted in any concrete results or agreements yet," Linde said. "Accordingly it is currently not foreseeable whether there will be any kind of transaction."

The news was first reported earlier today by The Wall Street Journal.

Shares in Munich-based Linde led gains in Frankfurt's Dax index and recently rallied 8.5% to €151.15. Danbury, Connecticut-based Praxair shares advanced 4.7% to $123.60 in early morning trading in New York. The combined market cap of the two companies is currently about $65 billion.

The news follows an acquisition of Randor, Pennsylvania-based Airgas by France's Air Liquide (AIQUY) in May this year, a move which created the world's largest industrial gas supplier with revenue exceeding €20 billion, and reflects pressure for consolidation in an industry facing declining commodity prices.

Over the past 12 months, natural gas prices have dropped 5%. Meanwhile, the Brent crude oil price has plummeted nearly 60% since mid-2014 to around $48/bbl.

The merger, if it were to happen, could be another example of a tax inversion, meaning that Praxair, smaller in revenue and market cap than Linde, would relocate its legal domicile to a lower-tax country. The average corporate tax rate in the U.S. is 40%, compared with 29.72% in Germany, according to KPMG.

Tax inversion deals have drawn attention as highly controversial. In April, pharmaceutical giant Pfizer walked away from a $160 billion merger with Ireland-based Allergan, following the U.S. Treasury's issuance of regulations to curb the benefits and limit the number of tax inversions.

Praxair was formed in 1907 as Linde Air Products company and became a division in Union Carbide, which Linde joined with, before being spun off as an independent company in 1992. As of December 31, 2015, Praxair had 26,657 employees worldwide, of which nearly 10,000 were in the U.S. It has presence in 50 countries.