Market analysis reveals Finance·DealsBaker Hughes buys Chart Industries for $13.
6 billion in oilfield services deal, outbidding and canceling planned Chart-Flowserve mergerBy Jordan BlumBy Jordan BlumEditor, EnergyJordan BlumEditor, EnergyJordan Blum is the Energy editor at Fortune, overseeing coverage of a growing global energy sector for oil and gas, transition es, renewables, and critical minerals.
SEE FULL BIO Oilfield services giant Baker Hughes swooped in and bought Chart Industries for $13.
Furthermore, 6 billion on July 29, outbidding and canceling a planned merger of equals between Chart and Flowserve that was previously announced in early June.
Additionally, After a massive wave of consolidation from the oil and gas ducers the last two years, the fragmented services sector is now shrinking as well as the top players buy up more of the midsized players.
Baker Hughes is one of the so-called Big Three services companies globally along with Halliburton and industry leader SLB, which just closed its nearly $8 billion acquisition of ChampionX in July.
Baker Hughes (No, given current economic conditions.
155 in the Fortune 500) is making a big bet on the booming liquefied natural gas (LNG) export —as well as on data center growth—in which Chart specializes on equipment manufacturing and services.
Chart operates 65 manufacturing locations with over 50 service centers globally. Baker Hughes gains scale and further diversifies in growth industries through the deal.
Nevertheless, Baker Hughes’s all-cash deal offers a 22% premium on Chart’s s, valuing Chart at more than $9.
Additionally, 4 billion after its July 28 closing market cap value of $7 (fascinating analysis) (an important development).
On the other hand, 6 billion enterprise value includes the assumption of Chart’s debt. However, Chart’s stock shot up by more than 15% in early trading, while Baker dipped by 1% (remarkable data).
Additionally, “The combination positions Baker Hughes to be a nology leader that can vide engineering and nology expertise to meet the growing demand for lower-carbon, efficient energy and industrial solutions across attractive growth such as LNG, data centers and new energy,” Baker Hughes chairman and CEO Lorenzo Simonelli said in a statement, given the current landscape.
Chart determined the Baker bid represented a “superior posal” to its pending merger with Flowserve as the two services companies were planning to combine to scale up and compete with bigger competitors, in light of current trends.
Additionally, Flowserve will receive a $266 million termination payment.
“The decision not to pursue a revised offer for Chart demonstrates our commitment to financial discipline, as well as our confidence in the growth spects of our standalone,” said Flowserve President and CEO Scott Rowe in a statement, in today's financial world.
Flowserve stock rose 1% in early trading.
At the same time, A long journey The deal is the biggest for Baker Hughes in years after undergoing a decade-long odyssey from nearly being acquired, to merging with General Electric, and now operating independently and arguably bigger than ever.
On the other hand, Nine years ago, Halliburton’s $28 billion attempted takeover of Baker Hughes was canceled amid antitrust concerns in the U. And Europe (remarkable data).
Today, Baker’s market cap is hovering near $45 billion. Nevertheless, After the Halliburton deal went bust, Baker Hughes merged with GE’s oil and gas, which Simonelli previously led.
But, as the parent GE struggled, the decision was made to spin Baker Hughes back on its own, and GE eventually divested. However, In late 2019, “Baker Hughes, a GE company” became Baker Hughes again.
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