Baker Hughes secured regulatory approval in the European Union for its proposed $13.6 billion acquisition of Chart Industries on July 10 after committing to a package of concessions requested by competition authorities. The U.S. oilfield services company notified markets that it would divest certain Chart assets to address the European Commission's concerns about potential preferential treatment of Chart's liquefied natural gas, or LNG, operations.
The deal, announced in July of last year, is aimed at expanding Baker Hughes' footprint in industrial technologies that serve LNG and data centre customers while leveraging its broader industrial and energy technology portfolio. The Commission said the remedies put forward by Baker Hughes were sufficient to mitigate the risk that the merged entity would have the ability and incentive to favour Chart's LNG business over rivals.
Specifically, Baker Hughes will divest Chart's proprietary process technology as well as its small-scale process technology business. In addition, the companies will be required to ensure their LNG equipment remains interoperable with equipment supplied by third parties. The European Commission stated these remedies will be enforceable for a 10-year period.
Chart manufactures industrial equipment used for handling gas and liquid molecules, including valves and measurement technologies. The company operates 65 manufacturing locations and maintains more than 50 service centres worldwide, reflecting a global footprint in equipment production and after-sales support.
The Commission's conditional approval clears a major regulatory hurdle for the transaction but attaches long-term obligations to the combined entity intended to preserve competitive conditions in the LNG equipment market. Baker Hughes characterized the acquisition as a strategic move to deepen capabilities serving LNG and data centre markets and to integrate Chart's technologies with its own industrial and energy technology offerings.
Context and implications
The European Commission's decision focuses on two core elements: preventing anticompetitive foreclosure of rivals in the supply of LNG process technology and ensuring technical interoperability so third-party equipment can interface with the combined company's products. The remedies are narrow in scope but extend for a decade, creating a long-term compliance requirement for Baker Hughes and Chart.