Flowserve Intends to Terminate Agreement to Acquire Velan

French authorities have informed both Flowserve and Velan that they will not provide the requisite regulatory approval for the sale of Velan to Flowserve. The initial arrangement agreement made on February 9, 2023, and amended on March 27, 2023, will be vacated. Flowserve informed Velan of its intent to terminate the agreement based on the lack of regulatory approval from France for the transaction to close.

The closing of the arrangement was always pending regulatory approvals. To meet that condition, Flowserve offered a package of remedies and undertakings to the French authorities to help the deal close, but they were informed that they will not be provided with the regulatory approvals, regardless of these offers.

“We thank our employees and other stakeholders who supported the proposed transaction,” said James Mannebach, chair of the board of directors of Velan. “Although we are disappointed with the outcome and the decision of the French regulators, we remain confident in the future of Velan’s business. We will now turn our entire focus to the operation of a successful business while continuing to assess all strategic options available to the company to create value for all of our stakeholders.”

Flowserve president and CEO, Scott Rowe, said: “We are obviously disappointed with the French government’s decision. We do not believe the decision aligns with the French government’s stated goal of encouraging foreign investment into France’s economy. Throughout this process, Flowserve worked diligently and proactively to address all of the concerns that were raised by the French government. We were optimistic about the acquisition of Velan and the numerous benefits this would provide for both companies and their stakeholders. We sincerely appreciate the efforts of our Flowserve associates and Velan team members who worked so tirelessly on the transaction. We remain excited about the future of Flowserve and will continue to aggressively pursue our 3D strategy.”

The full statements and more information can be found on the Flowserve and Velan websites.