DEFA14A: Chart Industries Acquired by Baker Hughes for $210/Share

Chart Industries' Board has approved an all-cash acquisition by Baker Hughes for $210 per share, terminating its prior agreement with Flowserve due to superior shareholder value.

Summary

• Chart Industries' Board terminated its prior merger agreement with Flowserve.
• The Board approved a definitive merger agreement for an all-cash acquisition by Baker Hughes Company at $210 per share.
• This decision was made because the Baker Hughes proposal presented greater value to shareholders due to its cash consideration and premium offer price relative to current and historic average share price.
• The transaction is expected to be completed by mid-year 2026.
• Upon completion, Chart will become an important part of Baker Hughes' Industrial & Energy Technology (IET) segment.
• Operations are expected to continue as business as usual for Chart's suppliers, with no anticipated changes to current orders or ongoing relationships.

Sentiment

Score: 8

Explanation: Highly positive for Chart shareholders due to a premium all-cash acquisition offer, which superseded a previous merger agreement. The deal promises enhanced resources and complementary strengths, though standard merger risks are present.

Positives

• All-cash transaction valued at $210 per share, offering greater value to shareholders.
• Premium offer price relative to Chart's current and historic average share price.
• Gains valuable access to the resources and innovation of Baker Hughes, a premier industry player.
• Combination brings together highly complementary strengths in heat transfer, air and gas handling, and process technologies (Chart) with rotating equipment, flow control, and digital technology (Baker Hughes).
• Anticipated smooth and seamless experience for supplier partners.

Negatives

• Termination of the prior merger agreement with Flowserve.
• Potential litigation relating to the proposed merger transaction.
• The transaction may be more expensive to complete than anticipated due to unexpected factors or events.

Risks

• Regulatory approvals may not be obtained or may be subject to unanticipated conditions, limitations, or restrictions.
• Failure to receive, on a timely basis or otherwise, the required transaction-related approval of Chart's stockholders.
• Potential delays in consummating the proposed merger transaction, including as a result of failure to receive any regulatory approvals or any conditions, limitations, or restrictions placed on such approvals.
• The possibility that competing offers or acquisition proposals may be made.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the merger agreement, including in circumstances which would require Chart or Baker Hughes to pay a termination fee.
• Unforeseen or unknown liabilities.
• Unexpected future capital expenditures.
• Potential litigation relating to the proposed merger transaction that could be instituted against Chart, Baker Hughes, or their respective directors.
• The effect of the announcement, pendency, or completion of the proposed merger transaction on the parties' business relationships and business generally.
• Risks that the proposed merger transaction disrupts current plans and operations of Chart or Baker Hughes.
• Potential difficulties in employee retention as a result of the proposed merger transaction, as well as the risk of disruption of management and ongoing business operations during the pendency of the proposed merger transaction.
• Uncertainties as to whether the proposed merger transaction will be consummated on the anticipated timing or at all.
• Changes in commodity prices.
• Negative effects of this announcement, and the pendency or completion of the proposed merger transaction on the market price of Chart's common stock and/or operating results.
• Rating agency actions and the ability to access shortand long-term debt markets on a timely and affordable basis.
• Various events that could disrupt operations, including severe weather, cybersecurity attacks, security threats, governmental response, and technological changes.
• Labor disputes, changes in labor costs, and labor difficulties.
• The effects of industry, market, economic, political, or regulatory conditions outside of Chart's or Baker Hughes' control.
• The possibility that Baker Hughes may not be able to obtain sufficient financing or otherwise have sufficient financial resources to pay the merger consideration on a timely basis or otherwise.
• Legislative, regulatory, and economic developments targeting public companies in the industrial sector.
• Global supply chain disruptions and the current inflationary environment.
• The substantial dependence of Chart's sales on the success of the energy, chemical, power generation, and general industries.
• Economic, political, and other risks associated with the international operations of Chart.
• Potential adverse effects resulting from the implementation of tariffs and related retaliatory actions and changes to or uncertainties related to tariffs and trade agreements.

Future Outlook

The transaction is expected to close by mid-year 2026, at which point Chart will become an important part of Baker Hughes' Industrial & Energy Technology (IET) segment. Operations are anticipated to continue as business as usual for supplier partners, with a dedicated team focused on a smooth transition due to complementary strengths.

Management Comments

• It is business as usual at Chart, and you should not expect any change in our operations, our current orders or our ongoing relationship with you.
• We'll continue to keep you apprised every step of the way.

Industry Context

This acquisition highlights a consolidation trend within the industrial and energy technology sectors, where companies seek to combine complementary strengths to enhance market position and leverage broader resources. Baker Hughes, a premier player, is expanding its core competencies by integrating Chart's specialized heat transfer and process technologies.

Comparison to Industry Standards

• The acquisition price of $210 per share, being an all-cash offer and a premium relative to Chart's historical share price, suggests a strong valuation for Chart's assets and market position.
• The Board's decision to terminate the Flowserve agreement in favor of Baker Hughes indicates that the Baker Hughes offer was deemed superior in terms of shareholder value, setting a high benchmark for similar transactions in the sector.

Legal Proceedings

• Potential litigation relating to the proposed merger transaction that could be instituted against Chart, Baker Hughes, or their respective directors.

Stakeholder Impact

• Shareholders: Significant positive impact due to a premium all-cash offer, providing greater value than the previous agreement.
• Suppliers: Expected to experience 'business as usual' with no anticipated changes in operations, current orders, or ongoing relationships.
• Employees: Potential difficulties in employee retention are identified as a risk during the merger process.

Next Steps

• Chart intends to file relevant materials with the SEC, including a proxy statement, to be mailed to stockholders seeking their approval of transaction-related proposals.
• A dedicated team is focused on planning for the transition.
• Chart will continue to keep supplier partners apprised every step of the way.
• Expected completion of the transaction by mid-year 2026.

Key Dates

Recommendation

The definitive all-cash acquisition offer of $210 per share by Baker Hughes represents a significant premium and superior value for Chart Industries shareholders compared to the previous Flowserve agreement. This provides a clear exit strategy at an attractive valuation. While standard merger risks exist (regulatory approvals, potential delays, litigation), the Board's determination of superior value makes this a highly favorable outcome for current investors, suggesting a strong buy for those looking to capitalize on the acquisition premium or a hold for existing shareholders awaiting completion.

Keywords

Merger, Acquisition, Baker Hughes, Chart Industries, SEC Filing, Proxy Statement, Energy Technology, Industrial, Shareholder Value, Cash Offer