Baker Hughes nears $13.6 billion deal to buy Chart, edging out Flowserve, FT reports

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(Reuters) -Oil and gas equipment supplier Baker Hughes is nearing a $13.6 billion cash deal to buy Chart Industries, edging out rival suitor Flowserve, with a buyout likely to be announced in the coming days, the Financial Times reported on Monday, citing sources who warned that the agreement was not final.

Baker Hughes has been trying to leverage its industrial and energy technology portfolio to drive growth and expand its presence in the natural gas and LNG sectors.

CEO Lorenzo Simonelli has been reshaping Baker Hughes to adapt to the global energy transition, shedding non-core assets while investing in cleaner energy solutions.

A potential deal would displace an agreement Chart made in June to combine with flow control systems maker Flowserve in a $19 billion all-stock merger.

That agreement has now been terminated, the FT reported.

The deal would follow a consolidation wave in the U.S. energy sector, which triggered $250 billion worth of deals in 2023, but witnessed a slowdown since the end of last year.

Baker Hughes declined comment, while Chart Industries and Flowserve did not respond to Reuters’ requests for comment.

Chart’s stock, which closed at $171.65 on Monday, climbed more than 17% to $202 in after-market trading.

Chart manufactures industrial equipment such as valves and measurement technology for gas and liquid molecule handling and had a market capitalization of $7.71 billion as of Monday’s close, as per LSEG data.

The deal with Baker Hughes would value Chart’s equity at $210 per share, a 22% premium to its market value, giving it an equity value of about $10 billion, the FT report said.

Baker Hughes’ decision to make a higher bid for Chart forced the latter’s board to reconsider its deal with Flowserve, the FT said.

(Reporting by Abu Sultan, Anusha Devang Shah; Editing by Tasim Zahid, Alan Barona and Mrigank Dhaniwala)