Emerson Announces Sale of Remaining Interests in Copeland to Blackstone
Rhea-AI Summary
Emerson (NYSE: EMR) announced the sale of its remaining 40% interest in the Copeland joint venture to Blackstone for approximately $3.5 billion. The transaction includes $3.4 billion in pre-tax cash proceeds, net of $0.1 billion in future indemnity obligations. This move aims to simplify Emerson's portfolio and boost its focus on automation markets. The deal, unanimously approved by Emerson's Board of Directors, is expected to close in the second half of 2024, subject to regulatory approvals. Emerson plans to use the $2.9 billion after-tax proceeds to pay down debt. The transaction will result in a net pre-tax gain of about $0.2 billion.
Positive
- Sale of remaining 40% interest in Copeland for $3.5 billion.
- Expected net pre-tax gain of approximately $0.2 billion.
- Pre-tax cash proceeds amounting to $3.4 billion.
- Transaction aims to simplify Emerson's portfolio.
- Enhanced focus on high growth automation markets.
- Board of Directors unanimously approved the transaction.
- Planned use of $2.9 billion after-tax proceeds to pay down debt.
Negative
- Transaction subject to regulatory approvals which can delay the process.
- Future indemnity obligations of $0.1 billion.
- Full exit from Copeland may reduce diversification in revenue streams.
News Market Reaction – EMR
In the trading session that priced this news, EMR gained 1.90%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Transaction Represents Important Simplification Milestone in Emerson's Portfolio Transformation
"This transaction is a key step to simplify our portfolio and enhance Emerson's focus as a global leader in automation," said Lal Karsanbhai, President and Chief Executive Officer of Emerson. "We believe now is the right time to execute our plans to fully exit the Copeland business. This agreement with Blackstone provides certainty and portfolio simplification to Emerson shareholders, while enhancing our focus on executing in our attractive, high growth automation markets."
"We appreciate Emerson's partnership and are pleased to reach this agreement to acquire full ownership of Copeland," commented Joe Baratta, Global Head of Blackstone Private Equity. "Copeland has a world-class team that is helping lead the transition to more energy efficient heating and cooling solutions – and we are excited to continue supporting its accelerated growth in the years ahead."
The transactions have been unanimously approved by Emerson's Board of Directors and are expected to close in the second half of calendar year 2024, subject to regulatory approvals and customary closing conditions. The transactions are expected to result in a net pretax gain of approximately
A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and GIC will invest alongside Blackstone as part of the transaction.
Advisors
Davis Polk & Wardwell LLP served as legal advisor and Goldman Sachs & Co. LLC served as exclusive financial advisor to Emerson. Joele Frank, Wilkinson Brimmer Katcher served as investor relations advisor to Emerson. Barclays served as lead financial advisor and Simpson Thacher & Bartlett LLP acted as legal counsel to Blackstone and Copeland. RBC Capital Markets, LLC also provided financial advisory services to Blackstone and Copeland. Debt financing related to the transaction is being led by RBC Capital Markets, LLC, Barclays, Goldman Sachs Bank
About Emerson
Emerson (NYSE: EMR) is a global technology and software company providing innovative solutions for the world's essential industries. Through its leading automation portfolio, including its majority stake in AspenTech, Emerson helps hybrid, process and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals. For more information, visit Emerson.com.
About Blackstone
Blackstone is the world's largest alternative asset manager. We seek to deliver compelling returns for institutional and individual investors by strengthening the companies in which we invest. Our more than
Forward-Looking and Cautionary Statements
Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impacts of the
Emerson uses our Investor Relations website, www.Emerson.com/investors, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts and social media. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Contacts
For Emerson:
Investors:
Colleen Mettler
(314) 553-2197
Media:
Joseph Sala / Greg Klassen
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
For Blackstone:
Matt Anderson
Matthew.Anderson@blackstone.com
(212) 390-2472
View original content to download multimedia:https://www.prnewswire.com/news-releases/emerson-announces-sale-of-remaining-interests-in-copeland-to-blackstone-302166523.html
SOURCE Emerson