Flowserve (FLS)-Chart Industries (GTLS) $19B All-Stock Merger Creates Powerhouse

Chart Industries (GTLS) and Flowserve (FLS) announced a transformative all-stock merger valuing the combined entity at approximately $19 billion. Under the agreement, Chart shareholders will receive 3.165 shares of Flowserve for each Chart share, resulting in Chart owners holding roughly 53.5% of the pro forma company and Flowserve shareholders holding 46.5%. The transaction is expected to close in the fourth quarter of 2025.

The merger aims to capitalize on robust demand for industrial cooling and fluid-handling solutions driven by investments in artificial intelligence, data centers, and broader infrastructure projects. BTIG analyst Gregory Lewis notes that approximately 42% of the combined revenue will come from aftermarket services, positioning the new entity as a leading hub for maintenance, repair, and operational support in key end markets.

• Merger values combined company at roughly $19 billion
• Chart shareholders receive 3.165 Flowserve shares per Chart share
• Merged leadership: Flowserve CEO Scott Rowe as CEO, Chart CEO Jill Evanko as board chair

• Chart’s market cap was $7.26 billion; Flowserve’s was $6.60 billion as of last close
• Deal expected to close in Q4 2025 with $300 million in annual cost synergies within three years
• Combined aftermarket services will comprise about 42% of total revenue

• New company to operate under a yet-to-be-announced name and brand
• Anticipated leadership alignment to drive integrated service offerings
• Focus on leveraging combined R&D and distribution networks in AI and data center markets

• The $19 billion all-stock merger between Chart Industries and Flowserve creates a global leader in industrial process technologies, combining complementary strengths in gas/liquid handling, flow management, and aftermarket services.
• Chart shareholders will receive 3.165 shares of Flowserve for each Chart share, resulting in a 53.5% stake in the combined company, while Flowserve shareholders hold 46.5%—a true merger of equals with aligned leadership and board representation.
• The combined company expects to generate approximately $8.8 billion in annual revenue, with 42% coming from high-margin aftermarket services, providing a more resilient and predictable cash flow profile.
• Management targets $300 million in annual cost synergies within three years, driven by procurement savings, operational efficiencies, and elimination of duplicate public company costs, plus additional commercial revenue synergies over time.
• The merger enhances scale and diversification, positioning the new entity to capture growth in high-demand sectors like AI, data centers, clean energy, hydrogen, LNG, and industrial gases, while maintaining a global installed base of over 5.5 million assets in more than 50 countries.
• With a strong balance sheet, robust cash flow, and a leverage ratio expected at 2.0x net debt to adjusted EBITDA at close, the company is well-positioned for continued investment, deleveraging, and steady dividends.
• Industry analysts and rating agencies have responded positively, citing improved competitive position, profitability, and market presence, with the potential for future credit upgrades if integration is successful.

• Despite the long-term potential, both Chart and Flowserve shares dropped on the merger announcement, reflecting investor concerns about integration risks, potential dilution, and the challenges of merging two sizable organizations.
• The shift in product mix means Chart’s previous focus on LNG and natural gas-related equipment will be diluted, with LNG representing only about 9% of the combined company’s operations, potentially disappointing some legacy Chart investors.
• Integration of two large, complex businesses always carries execution risk, including potential culture clashes, loss of key talent, and delays in realizing projected synergies.
• The combined company will operate under a new, as-yet-unannounced brand, which may create short-term confusion for customers and partners.
• While cost synergies are targeted at $300 million annually, achieving these savings could prove more difficult than anticipated, and any failure to deliver could pressure margins and erode investor confidence.
• The merger must still receive shareholder and regulatory approvals, and any delays or unexpected conditions could push back the anticipated Q4 2025 closing date.
• Increased scale and diversification may expose the company to broader macroeconomic and sector-specific risks, including cyclicality in industrial, energy, and infrastructure markets.

Investor response has been positive, with both stocks trading higher on news of the merger as market participants anticipate enhanced scale, improved cost efficiencies, and a broader geographic footprint. Analysts believe the combined entity will be well-positioned to pursue additional bolt-on acquisitions targeting complementary service businesses and adjacent technology platforms.

Long term, the new company is poised to strengthen its competitive position by harnessing complementary product portfolios—Chart’s precision gas and liquid handling equipment alongside Flowserve’s pump and valve systems. Management emphasizes that accelerated integration plans and a unified go-to-market strategy will underpin growth in critical end markets, including high-performance computing, industrial manufacturing, and energy transition projects.