Process equipment maker Chart Industries plans to terminate a merger agreement with Flowserve and will instead be acquired by oilfield services giant Baker Hughes, the companies announced Tuesday.
Under the proposed deal, Baker Hughes would acquire all outstanding Chart shares for $120 per share in cash, representing an overall value of $13.6 billion.
Baker Hughes officials said that Chart’s products are used in “every phase of the liquid gas supply chain,” from design and installation to monitoring and repair. The company said that the deal would advance its energy and industrial technology capabilities, as well as improve its revenue mix, provide “substantial” synergies, and expand its offerings in high-growth markets, such as data centers, space and “new energy.”
“We know Chart well, having worked alongside them on many critical energy infrastructure projects,” Baker Hughes Chairman and CEO Lorenzo Simonelli said in the announcement. “Their products and services are highly complementary to our offerings and strongly aligned with our intent to deliver distinctive and efficient end-to-end lifecycle solutions for our customers across their most critical applications.”
“The Baker Hughes team shares our engineering-focused culture and commitment to operational excellence,” added Chart President and CEO Jill Evanko. “Our complementary solutions fit seamlessly with Baker Hughes’ Industrial & Energy Technology segment, and together we can help our customers solve the most critical energy access and sustainability needs.”
The boards of each company unanimously approved the deal, which is expected to close by the middle of next year, subject to clearance by antitrust regulators and the approval of Chart shareholders.
Flowserve, in a separate statement, said that its board elected not to submit a revised merger offer after learning of the Baker Hughes bid. The company will receive a termination payment of $266 million.
“The decision not to pursue a revised offer for Chart demonstrates our commitment to financial discipline, as well as our confidence in the growth prospects of our standalone business,” said Flowserve President and CEO Scott Rowe.
