How will Baker Hughes pay for the acquisition, and what does it mean for leverage?

The deal is backed by a $14.9 billion 364-day senior unsecured bridge facility, which management intends to refinance with permanent senior unsecured notes and term loans, along with cash on hand and proceeds from asset sales. Management projects net leverage of about 2.25x at close, improving to 1.0x-1.5x within 24 months, and says it intends to maintain its A credit rating. Investors should note that the company's debt will rise materially until that deleveraging is achieved.

What are the main risks that could prevent the deal from closing?

Key risks include failure to obtain Chart stockholder approval, delays or failure to receive HSR and foreign antitrust clearances, any governmental restraint, a material adverse effect on Chart, and breaches of representations or covenants. The agreement's Outside Date is one year from signing, extendable by two six-month periods if regulatory conditions remain unsatisfied. The filing also flags risks around integrating Chart, achieving synergies, and managing the substantial new debt.

Who pays if the deal fails?

Chart would owe Baker Hughes a $250 million termination fee in specified circumstances. Baker Hughes would owe Chart a $500 million termination fee if the deal terminates at the Outside Date or due to final, non-appealable legal restraints tied to regulatory approvals. Separately, Baker Hughes has agreed to cover a $250 million termination fee owed to Flowserve under Chart's earlier terminated merger agreement, plus $8 million in expenses, and Chart must reimburse Baker Hughes for that amount in specified termination scenarios.

Why is Baker Hughes making this acquisition strategically?

Management says the deal transforms the Industrial & Energy Technology segment, roughly doubling its exposure to non-oil-and-gas markets to about 70% of the combined segment's revenue on a non-O&G basis. Target markets include LNG, data centers, power generation, industrial gas, and other industrial sectors. Management also expects accelerated aftermarket growth, as Baker Hughes' service footprint and digital tools expand Chart's installed base, which it projects will grow in units by 20% for Baker Hughes and 35% for Chart by 2030.

BKR 8-K: Material Agreements & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed July 29, 2025. Cited figures are marked; the original filing is the authoritative source.

Baker Hughes (BKR) has agreed to acquire Chart Industries (GTLS) in an all-cash transaction valued at $210^a per share, implying an enterprise value of approximately $13.6 billion and roughly 9x Chart's 2025 consensus EBITDA on a fully synergized basis.

The merger agreement, signed July 28, 2025, is structured as a reverse triangular merger, with Chart surviving as an indirect wholly owned subsidiary. Completion requires Chart stockholder approval, HSR and certain foreign antitrust clearances, and the absence of legal restraints or a material adverse effect on Chart. The deal is not subject to a financing condition, and management expects it to close around mid-year 2026.

The transaction is strategically aimed at reshaping Baker Hughes' Industrial & Energy Technology (IET) segment, which management says will roughly double its exposure to non-oil-and-gas markets such as LNG, data centers, power, and industrial gas. Management projects $325 million^b of annualized cost synergies by the end of year three, along with aftermarket growth from Chart's installed base. Management also expects double-digit adjusted EPS accretion in the first full calendar year after closing and double-digit ROIC by year five.

Investors should weigh the financing and balance-sheet implications. Baker Hughes has obtained a $14.9 billion^c 364-day bridge facility, which is expected to be replaced by permanent debt. Management projects net leverage of about 2.25x at close, with a return to 1.0x-1.5x within 24 months, and says it intends to maintain its A credit rating.

Share repurchases will be limited until leverage reaches that target. The agreement also carries significant break-fee exposure: a $250 million^d fee payable by Chart in specified circumstances, a $500 million fee payable by Baker Hughes in certain regulatory or legal-restraint scenarios, and a $250 million Flowserve termination payment plus $8 million in expenses that Baker Hughes has agreed to pay and that Chart must reimburse in specified circumstances.

02—Key points

Key Highlights

Acquisition of Chart Industries for $210 per share in cash, implying a $13.6 billion enterprise value and about 9x 2025E consensus EBITDA on a fully synergized basis.
Management expects $325 million of annualized run-rate cost synergies by the end of year three, at a one-time cost to achieve of $325 million.
Financing: a $14.9 billion 364-day senior unsecured bridge facility from Goldman Sachs and Morgan Stanley, to be replaced with permanent debt; the transaction is not subject to a financing condition.
Projected net leverage of about 2.25x at close, de-levering to 1.0x-1.5x within 24 months, with share repurchases constrained until that target is reached.
Management expects double-digit adjusted EPS accretion in the first full calendar year after closing and double-digit ROIC by year five.
Termination economics: $250 million Chart termination fee; $500 million Baker Hughes reverse fee in specified regulatory or legal-restraint scenarios; and Baker Hughes assumed a $250 million Flowserve termination fee plus $8 million in expenses, which Chart must reimburse in certain cases.
Closing conditions include Chart stockholder approval, HSR and certain foreign antitrust clearances, and no material adverse effect on Chart; expected close is mid-year 2026.

03—Questions

Frequently Asked Questions

What will Chart shareholders receive, and what is the deal valued at?
Chart common stockholders will receive $210.00 per share in cash, without interest. Baker Hughes describes the transaction as a $13.6 billion enterprise value, or roughly 9x Chart's 2025 consensus EBITDA on a fully synergized basis. Shares held by Baker Hughes, Chart, or their wholly owned subsidiaries, and shares held by stockholders who properly perfect appraisal rights, are excluded.
How will Baker Hughes pay for the acquisition, and what does it mean for leverage?
The deal is backed by a $14.9 billion 364-day senior unsecured bridge facility, which management intends to refinance with permanent senior unsecured notes and term loans, along with cash on hand and proceeds from asset sales. Management projects net leverage of about 2.25x at close, improving to 1.0x-1.5x within 24 months, and says it intends to maintain its A credit rating. Investors should note that the company's debt will rise materially until that deleveraging is achieved.
What are the main risks that could prevent the deal from closing?
Key risks include failure to obtain Chart stockholder approval, delays or failure to receive HSR and foreign antitrust clearances, any governmental restraint, a material adverse effect on Chart, and breaches of representations or covenants. The agreement's Outside Date is one year from signing, extendable by two six-month periods if regulatory conditions remain unsatisfied. The filing also flags risks around integrating Chart, achieving synergies, and managing the substantial new debt.
Who pays if the deal fails?
Chart would owe Baker Hughes a $250 million termination fee in specified circumstances. Baker Hughes would owe Chart a $500 million termination fee if the deal terminates at the Outside Date or due to final, non-appealable legal restraints tied to regulatory approvals. Separately, Baker Hughes has agreed to cover a $250 million termination fee owed to Flowserve under Chart's earlier terminated merger agreement, plus $8 million in expenses, and Chart must reimburse Baker Hughes for that amount in specified termination scenarios.
Why is Baker Hughes making this acquisition strategically?
Management says the deal transforms the Industrial & Energy Technology segment, roughly doubling its exposure to non-oil-and-gas markets to about 70% of the combined segment's revenue on a non-O&G basis. Target markets include LNG, data centers, power generation, industrial gas, and other industrial sectors. Management also expects accelerated aftermarket growth, as Baker Hughes' service footprint and digital tools expand Chart's installed base, which it projects will grow in units by 20% for Baker Hughes and 35% for Chart by 2030.

04—Continue

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