US industrial gas supplier Praxair Inc is in early-stage talks to acquire German peer Linde AG and create the biggest company in their sector with a market value of more than $60 billion, a person familiar with the matter said.

Such a deal would underscore the wave of consolidation sweeping the industrial gas sector, as slower economic growth has weakened demand in the manufacturing, metals and energy sectors and put pressure on smaller players to compete.

A combination of Praxair and Linde would also test the tolerance of regulators for more transformative deals in a year that other mega deals, such as US oilfield services provider Halliburton Co's $34.6 billion acquisition of Baker Hughes Inc, were shot down due to antitrust concerns.

Details of the talks, which were first reported by the Wall Street Journal, were not immediately clear and any potential deal could still fall apart, according to the source.

The source spoke on condition of anonymity because the talks were confidential. Representatives for Danbury, Connecticut-based Praxair and Munich, Germany-based Linde could not be immediately reached for comment.

The deal would represent a serious challenge to France's Air Liquide, which acquired US peer Airgas Inc earlier this year for $10.3 billion in a bid to expand into the United States, the largest market for industrial gasses.

Praxair is an industrial gas supplier in North and South America, Asia and Europe, while Linde Group's core business offers planning, project development and construction of turnkey industrial plants used in fields, such as petrochemical and chemical industries.

In April, Praxair, not known for attempting large acquisitions, bought five small industrial gas businesses, which had combined 2015 annual sales of more $40 million.

When Air Liquide and Airgas merged, analysts pointed out that the deal would help Air Liquide overtake rivals including Linde AG, Air Products and Praxair. Air Liquide was also able to secure a spot in the North American market and speed diversification away from slow-growth in Europe. - Reuters