Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
The US Industrial Chart Industry and Flow Rate has agreed to a $19 billion all-share merger to create a leading provider of products and services that address liquid and gas movements in sectors, including LNG, nuclear and data centers.
While Chart specializes in handling gas and liquids at very low temperatures, primarily targeting industrial clients, Flowserve is compatible with water and chemical companies, providing pumps, valves, seals, flow control products and services.
The $19 billion deal, including debt, will help the two companies frame as an equal merger and compete with larger groups in the so-called industrial processing sector, including US rivals Parker Honeyfin, Ingersall Land and Dover.
As part of the agreement, chart shareholders announced Wednesday will receive 3.1 flowserve shares for each existing share they own, managing 53.5% of the group holding the remaining shares and Flowserve shareholders.
Flowserve CEO Scott Rowe will run the combined company, with Chart CEO Jill Evanko as chairman of the board. Rowe said the merger will give newly formed entities “scale and resilience.”
The merged group, headquartered in Dallas, Texas, will be given a new name, but generated around $8.8 billion in revenue in the 12 months leading up to the end of March. Over two-fifths of that came from aftermarket services, including repairs, maintenance, upgrades and more.
This transaction is due to a significant slowdown in mergers and acquisition activities over the past few months, especially as companies tackle complex and global supply chain policies fallout.
A Flowserve executive told analysts in April that the “majority” of the products sold in the US were manufactured and assembled domestically. Similarly, the chart says it is “mainly” manufactured in China and the US.
During its latest revenue call, Flowserve said the significant impact of trade policy on revenues that President Donald Trump’s trade policy has no changes or easing is between $90 million and $100 million, with the chart estimated at around $50 million.
Chart stocks fell 7.2% in Wednesday morning trading on Wall Street, but Flowserve fell 4%, earning the group $6.8 billion and $6.3 billion in market capitalizations, respectively.
Management said the transaction will close in the fourth quarter of this year and will bring about a revenue synergy over time, offering around 2% in additional growth.
