June 11, 2025 | Industrials | North America | Active
On 4-Jun-25, US industrial equipment manufacturer Chart Industries (“Chart”) agreed to merge with Flowserve, a maker of flow control systems, in an all-stock transaction aimed at creating a leader in industrial process technologies. Under the terms of the definitive agreement, Chart shareholders will receive 3.165 Flowserve shares for each Chart share and the transaction is being touted as a “merger-of-equals”, whereby upon completion, Chart shareholders will own 53.5% of the merged entity, while Flowserve shareholders will hold the remaining 46.5%. Although Chart shareholders will hold the majority of the combined entity’s shares, for all intents and purposes, and for risk arbitrage calculations, Chart is considered the ‘target.’ Based on Flowserve’s closing share price on 3-Jun-25 ($50.52 per Flowserve share), at announcement, the merger ratio valued Chart at $159.90 per share, a -1.0% discount to Chart’s $161.59 undisturbed share price. Flowserve is permitted to continue paying its quarterly dividend, up to $0.21 per share and in-line with its historical practice – upcoming distributions are expected in June (ex-date 27-Jun-25), September (26-Sep-25), then late December, if the merger remains pending. Chart does not currently pay a dividend. Both boards have unanimously approved the deal. The new, combined board will comprise of 12 directors – six from each company. Jill Evanko, Chart’s current president and CEO, will become Chair, while Scott Rowe, Flowserve’s CEO, will lead the enlarged entity as its chief executive. The pro forma company will be headquartered in Texas (Flowserve’s headquarters), while maintaining a presence in both Atlanta (Chart’s headquarters) and Houston, and a global footprint spanning over 50 countries. A new name and branding will be adopted at closing. Conditions to completion include approvals (50%) by both sets of shareholders and regulatory approvals, including under the HSR Act. The merger agreement, dated 3-Jun-25, includes ...
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