DEFM14A: Chart Industries to Merge with Baker Hughes in $210 Cash Deal

Chart Industries' Board unanimously recommends stockholders approve an all-cash acquisition by Baker Hughes for $210 per share, offering a significant premium and immediate liquidity.

Summary

• Chart Industries, Inc. will merge with Tango Merger Sub, Inc., a wholly-owned subsidiary of Baker Hughes Company, with Chart surviving as a wholly-owned subsidiary of Baker Hughes.
• Each outstanding share of Chart common stock (excluding Canceled and Dissenting Shares) will be converted into the right to receive $210.00 in cash, without interest and subject to withholding taxes.
• The Chart Board unanimously determined the merger is advisable, fair, and in the best interests of Chart and its stockholders, recommending a 'FOR' vote on the Merger Proposal.
• The merger consideration represents a 30.0% premium to Chart's closing stock price on June 3, 2025, and a 22.3% premium to its closing price on July 28, 2025.
• The transaction is an all-cash acquisition, providing immediate liquidity and certainty of value to Chart stockholders.
• Baker Hughes will fund the $250 million termination fee and $8 million in expenses payable by Chart to Flowserve Corporation in connection with the termination of a prior merger agreement.
• The merger is subject to Chart stockholder approval, required regulatory approvals (including HSR Act and non-U.S. antitrust/foreign investment laws), and the absence of legal restraints.
• The special meeting of stockholders to vote on the proposals will be held virtually on October 6, 2025, at 8:00 a.m. Eastern Time.
• Chart's common stock will be delisted from the NYSE and deregistered under the Exchange Act following the merger's completion.

Sentiment

Score: 9

Explanation: The filing details an all-cash acquisition at a substantial premium, offering immediate and certain value to shareholders. The board's unanimous recommendation, coupled with the buyer covering prior termination fees and no financing contingency, indicates a highly favorable outcome for Chart's stockholders.

Positives

• The all-cash consideration of $210.00 per share provides immediate liquidity and certainty of value to Chart stockholders, eliminating risks associated with stock-based consideration and future market fluctuations.
• The merger consideration represents a significant premium of approximately 30.0% to Chart's unaffected share price on June 3, 2025, and 22.3% to its closing price on July 28, 2025.
• The transaction is a straightforward all-cash acquisition, avoiding the complex integration, upfront investment, and synergy realization uncertainties associated with the previously terminated stock-for-stock merger with Flowserve.
• Baker Hughes will pay the $250 million termination fee and $8 million in merger-related expenses owed by Chart to Flowserve, reducing Chart's financial burden.
• The merger is not subject to any financing condition, enhancing the likelihood of consummation.
• Baker Hughes' stockholder approval is not required for the merger, simplifying the approval process.
• Chart stockholders who do not vote in favor of the merger and comply with Delaware law can exercise appraisal rights to seek fair value for their shares.

Negatives

• Chart will cease to exist as an independent public company, meaning its stockholders will no longer participate in its future growth or potential value increases.
• Chart will incur costs related to the merger, a portion of which will be payable whether or not the merger is completed.
• The payment by Chart of $8 million to Flowserve in respect of certain expense reimbursements arising out of the Flowserve Merger Agreement and its termination.

Risks

• The merger may not be completed in a timely manner or at all, which could adversely affect Chart's business and market price.
• Failure to obtain the required approval of Chart's stockholders could prevent the merger.
• Failure to obtain, or delays in obtaining, required regulatory approvals from governmental authorities, or the imposition of burdensome conditions on such approvals, may cause the parties to abandon the merger.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement, including circumstances requiring Chart or Baker Hughes to pay a termination fee.
• The announcement and pendency of the merger could negatively impact Chart's business relationships, operating results, and employee retention, and divert management's attention.
• Potential for litigation related to the merger and associated costs, burden, and inconvenience.
• Restrictions in the Merger Agreement on Chart's business conduct prior to consummation may delay or prevent Chart from undertaking business opportunities.
• The Merger Agreement prohibits Chart from soliciting or engaging in discussions regarding alternative strategic transactions, subject to limited exceptions.
• The requirement for Chart to pay Baker Hughes a termination fee of $250 million and reimburse $258 million (Flowserve termination fee and expenses) could discourage other competing acquisition proposals.

Future Outlook

The merger is anticipated to be consummated by mid-year 2026, subject to stockholder and regulatory approvals. Following completion, Chart will become a wholly-owned subsidiary of Baker Hughes, delisted from the NYSE, and no longer required to file periodic reports with the SEC. Chart's internal projections forecast continued growth in sales, EBITDA, and free cash flow through 2030, but these projections do not account for the merger's effects.

Management Comments

• The Chart Board unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of Chart and its stockholders.
• The Chart Board authorized, approved, and adopted the Merger Agreement and the transactions contemplated thereby.
• The Chart Board directed that the Merger Agreement be submitted to the stockholders of Chart for approval at the Special Meeting.
• The Chart Board recommended that Chart's stockholders vote FOR the approval of the Merger Agreement, FOR the Compensation Advisory Proposal, and FOR the Adjournment Proposal.
• Andrew R. Cichocki, Chairman of the Board, extended appreciation for continued stockholder support and consideration of the matter.

Industry Context

Chart Industries is a global leader in process technologies and equipment for clean energy and industrial applications, including LNG, hydrogen, biogas, and CO2 capture. Baker Hughes is an energy technology company with diversified services across the energy and industrial value chain. This acquisition represents a strategic move by Baker Hughes to expand its portfolio into Chart's specialized clean energy and industrial gas handling sectors, aligning with broader industry trends towards decarbonization and energy transition. The all-cash nature of the deal provides Chart's shareholders with immediate value, contrasting with the stock-based consideration of the previously terminated Flowserve merger, which faced market skepticism regarding integration and synergy realization.

Comparison to Industry Standards

• The $210.00 per share all-cash offer represents a 30% premium over Chart's unaffected share price on June 3, 2025, which is a strong premium compared to typical M&A transactions in the industrial and energy sectors.
• Wells Fargo's selected companies analysis, using EBITDA multiples of 10.00x-12.00x for 2025E and 9.00x-11.00x for 2026E, indicated an implied equity value per share range of $167.63 to $223.06. The $210.00 offer falls within this range, suggesting it is financially sound relative to comparable public companies like Alfa Laval AB, Atlas Copco Group, Dover Corporation, and Ingersoll Rand Inc.
• Wells Fargo's selected transactions analysis, applying LTM EBITDA multiples of 11.0x-13.0x, indicated an implied equity value per share range of $163.41 to $205.70. The $210.00 offer exceeds the upper end of this range, suggesting a favorable valuation compared to recent M&A deals involving companies like Johnson Matthey PLC's Catalyst Technologies Business and ChampionX Corporation.
• The discounted cash flow analysis, using discount rates of 12.0%-14.0% and terminal EBITDA multiples of 9.0x-11.0x, yielded an implied equity value per share range of $171.32 to $229.77. The $210.00 offer is well within this intrinsic valuation range.
• The absence of a financing condition for Baker Hughes is a positive differentiator, providing greater deal certainty compared to transactions that might be contingent on securing debt or equity funding.

Management Changes

Corporate Governance

Legal Proceedings

• Potential litigation related to the merger is a risk, and the parties have agreed to cooperate in defense and settlement of any such actions.
• Neither Chart nor Baker Hughes, nor their representatives, shall cease to defend, consent to judgment, or propose settlement of any merger-related litigation without the other party's prior written consent.

Related Party Transactions

• Certain compensation and benefits may be paid or become payable to Chart's named executive officers and directors in connection with the merger, including accelerated vesting of equity awards and severance benefits, which are considered interests in addition to those of general stockholders.

Stakeholder Impact

• Shareholders: Will receive $210.00 cash per share, providing immediate liquidity and a significant premium, but will no longer hold equity in an independent Chart or participate in its future growth.
• Employees: Continuing employees will receive base salary/wage rates and target annual cash bonus opportunities no less favorable for one year post-merger, and substantially comparable other compensation and benefits (excluding certain items). Service credit for eligibility, vesting, and severance will be recognized. Potential for cash-based awards under transaction-related bonus and retention pools.
• Customers and Suppliers: The announcement and pendency of the merger could potentially impact business relationships, though the company aims to preserve advantageous relationships.
• Creditors: Chart's existing credit facility will be terminated and obligations repaid; outstanding senior notes may be prepaid, redeemed, or subject to exchange/tender offers, impacting debt holders.
• Management and Directors: Executive officers and directors have interests in the merger, including accelerated vesting of equity awards and potential severance benefits, which are subject to a non-binding advisory vote by stockholders.

Next Steps

• Chart stockholders will vote on the Merger Proposal, Compensation Advisory Proposal, and Adjournment Proposal at a special meeting on October 6, 2025.
• Baker Hughes and Chart will continue to seek all required regulatory approvals, including under the HSR Act and non-U.S. antitrust/foreign investment laws.
• Chart common stock will be delisted from the NYSE and deregistered under the Exchange Act as promptly as practicable following the Effective Time.
• Baker Hughes will cause Chart or its subsidiaries to pay amounts due to equity award holders (stock options, RSUs, PSUs) following the Effective Time.
• The Chart Employee Stock Purchase Plan (ESPP) will be terminated effective immediately prior to the Effective Time, with final purchases on August 29, 2025.

Key Dates

Recommendation

The all-cash offer of $210.00 per share represents a substantial premium (30% over unaffected price) and provides immediate, certain value to Chart stockholders. The unanimous board recommendation, coupled with Baker Hughes covering the prior termination fees and the absence of a financing contingency, significantly de-risks the transaction for shareholders. While regulatory approvals are still pending, Baker Hughes' commitment to obtain them and the substantial reverse termination fee ($500 million) further enhance deal certainty. This is a highly attractive exit for Chart shareholders.

Keywords

Merger, Acquisition, Cash Offer, Chart Industries, Baker Hughes, SEC Filing, Proxy Statement, GTLS, BKR, Energy Technology, Process Technologies, Liquefied Natural Gas, Hydrogen, Biogas, CO2 Capture, Shareholder Vote, Regulatory Approval