Chart Industries, Inc. ( GTLS ) and Flowserve Corporation ( FLS ) shares are trading higher premarket on Wednesday.

The companies reached an agreement to merge in an all-stock transaction for $19 billion.

As per the deal, Chart shareholders will receive 3.165 shares of Flowserve ( FLS ) common stock for each Chart common stock share they own upon the transaction’s close.

The transaction is expected to close in the fourth quarter of 2025, subject to the approval of Chart and Flowserve ( FLS ) shareholders, the receipt of regulatory approvals, and other closing conditions.

Post closure of the deal, Chart shareholders will own approximately 53.5% and Flowserve ( FLS ) shareholders about 46.5% of the combined company on a fully diluted basis.

Synergies: The merger is projected to yield around $300 million in annual cost synergies within three years of the transaction’s completion.

Additionally, the combined companies expect to realize commercial revenue synergies over time, representing at least an incremental 2% growth on the new entity’s revenue.

The merger is anticipated to be meaningfully accretive to the combined company’s Adjusted EPS in the first year after closing.

Combined Company Details: As of the end of the first quarter of 2025, the combined entity generated approximately $8.8 billion in net revenue on a last twelve months (LTM) basis.

This revenue comes from diverse, high-growth, and attractive end markets, with roughly $3.7 billion (or about 42% of combined revenue) derived from aftermarket services.

With over 5.5 million assets installed across more than 50 countries, the merged company will manage the entire customer lifecycle, from initial process design to ongoing aftermarket support.

The new entity is projected to have a leverage ratio of 2.0x net debt to adjusted EBITDA at close.

Scott Rowe, president and CEO of Flowserve ( FLS ), said, “Chart’s and Flowserve’s highly complementary businesses will strengthen our ability to meet our customers’ needs, empower innovation, and drive long-term, sustainable growth. The combined company will operate across diversified end markets with further exposure to premium, high-growth areas and a substantial aftermarket franchise – resulting in increased commercial opportunities.”

As of March 31, Flowserve’s cash and cash equivalents were $540.8 million, and Chart Industries’ was $296.2 million.

Price Action: At the last check on Wednesday, GTLS shares were up 3.36% at $166.90, and FLS shares rose 5.38% at $53.25 premarket.

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