DEFA14A: Chart Industries to Merge with Baker Hughes

Chart Industries announces its proposed merger with Baker Hughes, an energy technology company, expected to close by mid-2026.

Summary

• Chart Industries is being acquired by Baker Hughes Company, an energy technology company with operations in over 120 countries.
• The transaction is expected to be completed by mid-year 2026, subject to shareholder approval and customary closing conditions.
• Upon completion, Chart will become an important part of Baker Hughes' Industrial & Energy Technology (IET) segment.
• Chart will maintain a significant presence in Ball Ground, Georgia, and across its existing footprint.
• The combined business within IET will continue to be led by Ganesh Ramaswamy, Executive Vice President of IET.
• No planned changes to employee compensation or benefits are anticipated as a direct result of this transaction.
• A dedicated team will collaborate with Baker Hughes to develop comprehensive integration plans.
• Customers and suppliers are advised that it remains 'business as usual' for Chart until the transaction closes, with no immediate impact on day-to-day operations or existing contracts.

Sentiment

Score: 7

Explanation: The filing presents the merger in a largely positive light, emphasizing benefits for employees, customers, and the strategic fit. However, it also includes a comprehensive list of standard merger-related risks and uncertainties, which temper the overall sentiment.

Positives

• The acquisition is seen as a testament to Chart's business model, momentum, and talent, recognizing the strength of its portfolio.
• Chart's solutions are complementary to Baker Hughes' Industrial & Energy Technology segment, enabling combined efforts to address critical energy access and sustainability needs.
• Joining Baker Hughes provides Chart with access to the resources and innovation of a premier industry player.
• Baker Hughes' core competencies in rotating equipment, flow control, and digital technology pair well with Chart's expertise in heat transfer, air and gas handling, and process technologies.
• The transaction is expected to benefit all stakeholders, including valued customers, by enhancing capabilities and offerings.
• No immediate changes to employee compensation or benefits are planned, aiming to provide stability for staff.

Risks

• Regulatory approvals may not be obtained, or may be subject to unanticipated conditions, limitations, or restrictions.
• Failure to receive required transaction-related approval from Chart's stockholders.
• Potential delays in consummating the proposed merger transaction, including due to regulatory approval issues.
• Possibility of competing offers or acquisition proposals being made.
• Occurrence of any event, change, or circumstance that could lead to the termination of the merger agreement, potentially requiring termination fees.
• Unforeseen or unknown liabilities may arise.
• Failure to obtain necessary approvals and support from customers, stockholders, regulatory bodies, and other stakeholders.
• Unexpected future capital expenditures could impact the transaction.
• Potential litigation related to the proposed merger transaction against Chart, Baker Hughes, or their respective directors.
• The transaction may be more expensive to complete than anticipated due to unexpected factors or events.
• The announcement, pendency, or completion of the proposed merger transaction could negatively affect business relationships and general business operations.
• 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.
• Risk of disruption of management and ongoing business operations during the pendency of the proposed merger transaction.
• Uncertainties regarding whether the proposed merger transaction will be consummated on the anticipated timing or at all.
• Changes in commodity prices could impact the combined entity.
• Negative effects of the announcement, 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 responses, and technological changes.
• Labor disputes, changes in labor costs, and labor difficulties.
• 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.
• Legislative, regulatory, and economic developments targeting public companies in the industrial sector.
• Global supply chain disruptions and the current inflationary environment.
• 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 Chart's international operations.
• Potential adverse effects resulting from the implementation of tariffs and related retaliatory actions, and changes to or uncertainties related to tariffs and trade agreements.
• Other unpredictable factors not discussed could also have material adverse effects on forward-looking statements.

Future Outlook

The proposed merger is expected to be completed by mid-year 2026, subject to shareholder approval and customary closing conditions. Chart will become an integral part of Baker Hughes' Industrial & Energy Technology segment, maintaining its significant presence and leadership under Ganesh Ramaswamy. Integration plans are underway, and the focus remains on business as usual until the transaction closes.

Management Comments

• "This transaction is a testament to all of your hard work and the strength of our portfolio."
• "This acquisition demonstrates Baker Hughes recognition of something that we’ve been confident in all along – the power of our business model, the momentum we’ve built and the talent of our people."
• "We are confident that this transaction is a positive step forward for Chart, and we expect it to benefit all of our stakeholders, including our valued customers."
• "The combined business will continue to be led by Ganesh Ramaswamy, Executive Vice President of IET, and we look forward to working closely with him to plan for the seamless integration of Chart into IET."

Industry Context

This merger signifies a consolidation within the energy technology and industrial sectors, aiming to combine complementary strengths. Baker Hughes, a global energy technology company, is expanding its capabilities by integrating Chart's specialized solutions in heat transfer, air and gas handling, and process technologies. This move is aligned with broader industry trends focusing on comprehensive solutions for energy access and sustainability needs.

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: Required to approve the transaction; will receive a proxy statement with important information.
• Employees: No planned changes to compensation or benefits; will join a world-class organization; business as usual until close; potential difficulties in retention are a risk.
• Customers: Expected to benefit from access to Baker Hughes' resources and innovation; advised to expect no impact on day-to-day operations until close.
• Suppliers: Advised that it is business as usual and contacts will remain the same; no changes to contracts until close; expected to become an even stronger partner.
• Creditors: Not explicitly mentioned, but access to debt markets and rating agency actions are listed as risks.

Next Steps

• Chart intends to file relevant materials with the SEC, including a proxy statement, to seek stockholder approval.
• A dedicated team will collaborate with Baker Hughes representatives to develop comprehensive integration plans.
• Chart will keep employees updated and informed as decisions are made throughout the merger process.

Key Dates

Keywords

Merger, Acquisition, Chart Industries, Baker Hughes, Energy Technology, Industrial Sector, SEC Filing, Corporate Governance, Shareholder Approval, Integration