Praxair Inc. is in discussions to combine with Germany’s Linde AG, people familiar with the matter said, in a deal that would create the world’s largest industrial-gas supplier and continue a wave of consolidation in the industry.

Details of the talks couldn’t be learned, and one person cautioned they are fragile and could fall apart. If there is an agreement, there is also no guarantee antitrust regulators would approve it. A deal would combine companies each worth about $30 billion and rank as one of the largest tie-ups...