From Yahoo Finance: 2025-06-16 08:00:00

Chart Industries and Flowserve have agreed to merge in an all-stock deal, aiming for significant revenue and cost synergies. Despite this, the stock prices of both companies fell after the announcement. The merger will save costs and strengthen exposure to LNG and nuclear markets, offering growth opportunities.

The tie-up of Chart Industries and Flowserve will provide end-to-end industrial systems for customers, leading to cross-selling revenue opportunities and potential 2% incremental growth. The companies aim to better serve the natural gas and nuclear markets, which are growing due to demand for clean electricity from AI data centers.

Both Chart and Flowserve are poised for double-digit growth in nuclear and LNG markets, amidst a forecast for surging AI demand. The merger is expected to yield substantial cost savings, with projected synergies of $300 million over three years and potential refinancing opportunities to lower leverage ratios.

The merger of Chart Industries and Flowserve presents an opportunity for cost savings and margin boosts. The combined companies are undervalued, trading at low forward P/E ratios and an attractive EV-to-EBITDA multiple. With strong positions in growth markets, the merger could lead to significant returns for investors post-closing.

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Read more: 3 Reasons to Buy Chart Industries (or Flowserve Corporation) Like There’s No Tomorrow