Following news of a possible takeover deal, Chart Industries, Inc.’s (NYSE: GTLS) stock saw a sharp increase on Monday. After-hours trading saw GTLS shares rise 18.28% to $203.02.
According to the Financial Times, the rise coincides with Baker Hughes, a major player in the oil and gas equipment industry, apparently nearing completion of a $13.6 billion cash agreement to buy Chart Industries. However, the deal is still being negotiated and is not yet complete, the magazine stated.
Baker Hughes Edges Out Rival Bid
Baker Hughes’ reportedly proposed deal surpasses a previous $19 billion all-stock merger agreement between Chart Industries and Flowserve, which was announced in June but has since been terminated. The proposal from Baker Hughes caused Chart’s board to reevaluate its previous commitment to Flowserve by providing an equity valuation of $210 per share, which was 22% more than Chart’s market price.
The purchase is in line with Baker Hughes’ overarching plan to increase its presence in the LNG and natural gas markets by diversifying its portfolio of energy and industrial technologies.
Part of a Larger Energy Sector Consolidation
The possible takeover comes amid an ongoing wave of consolidation in the U.S. energy industry. In 2023 alone, mergers and acquisitions in the sector reached $250 billion, although activity slowed toward the end of the year.
As of Monday’s close, Chart Industries maintained a market capitalization of $7.71 billion. The company is recognized for manufacturing advanced industrial equipment, including valves and measurement systems for handling gas and liquid molecules.
LNG Alliance Selects Chart’s IPSMR Technology
In a separate development this month, Chart Industries secured a significant contract with LNG Alliance Pte Ltd for its Amigo LNG export facility in Guaymas, Sonora, Mexico. With a 7.8 million tonnes per annum (MTPA) capacity, the plant will use Chart’s modular liquefaction system and IPSMR (Integrated Pre-cooled Single Mixed Refrigerant) process technology.
By enabling operators to customize liquefaction systems to site-specific conditions, this technique aims to maximize efficiency by guaranteeing the optimal ratio of cold box capacity to compression power. It is anticipated that this capacity would reduce expenses for LNG Alliance while improving operational performance.