Abstract: The present invention provides a vertical falling film shell and tube heat exchanger, where the falling film is formed on the exterior surface of the tubes. A distribution plate is provided below an upper tubesheet, and a sparger plate having sparger holes is provided between the upper tubesheet and the distribution plate. A plurality of vertical, parallel tubes pass through the distribution and sparger plates and are sealingly engaged with the upper tubesheet and the sparger plate. The distribution plate has oversized holes through which the tubes pass, an annular space being defined around each tube where the tube passes through the distribution plate. The first fluid passes one time through the tubes, and the second fluid is fed to the shell side as two streams, a liquid stream and a vapor stream. The liquid stream is introduced to the shell between the upper tubesheet and the sparger plate and drains downwardly onto the second distribution plate through the sparger holes.