FRANKFURT AM MAIN - German industrial gases giant Linde has warned that its mega-merger with US-based Praxair has hit a major hurdle, with US competition regulators unexpectedly pushing it to offload more assets.

The two firms' efforts to win approval for the merger could be subject to requirements "more onerous than previously expected," Linde said in a statement late Saturday.

The proposed tie-up would create the world's largest industrial gases firm with annual revenues of more than $30 billion (26 billion euros), overtaking Linde's longtime French rival Air Liquide.

Antitrust authorities on both sides of the Atlantic are closely scrutinising the deal and Linde said the latest US demands could surpass a "threshold" agreed with Praxair -- potentially derailing the deal.

"Linde was informed today that the US Federal Trade Commission expressed expectations with regards to further divestiture commitments and prospective purchasers which are considered required for a merger clearance," Linde said.

These demands "are likely to exceed a threshold for merger clearances previously agreed between Linde and Praxair", the statement added.

According to Bloomberg News, both groups agreed in advance they could pull out of the merger if they were forced to offload units with more than 3.7 billion euros in annual revenues, or 1.1 billion euros in earnings before interest, depreciation and amortisation.

Linde said discussions with US regulators were continuing to find "a mutually acceptable result".

Hoping to earn competition authorities' favour for the merger, Linde has already agreed to sell off much of its business in the Americas for $3.3 billion if the deal goes ahead.

Meanwhile, Praxair has promised to offload European businesses worth $5.9 billion, in a concession to EU antitrust authorities.

Linde said last month preparations for the merger were in "full swing" and that it hoped to complete the tie-up -- worth around $65 billion -- in the second half of the year.

If the deal is derailed, it would mark the second failed attempt by both companies to join forces after initial merger talks in 2016 collapsed on reports of infighting over executive positions and management locations.