Wednesday, July 24, 2024
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Emerson announced its agreement to divest its remaining stake in the Copeland joint venture to Blackstone in a deal worth $3.5 billion, marking a strategic move to streamline its business operations and sharpen its focus on automation. Private equity funds managed by Blackstone will acquire Emerson’s 40% equity ownership in the joint venture.

CEO Lal Karsanbhai expressed confidence in the timing of the decision to fully exit the Copeland business, citing the agreement with Blackstone as providing certainty and portfolio simplification for Emerson shareholders. The Copeland joint venture was established following Emerson’s $14 billion deal to sell a majority stake in its Climate Technologies unit to Blackstone in October 2022, as part of Emerson’s strategic shift towards becoming a prominent player in the global automation industry.

Emerson has intensified its automation efforts through strategic acquisitions, including the $8.2 billion takeover of measurement equipment maker National Instruments. This move enabled Emerson to solidify its presence in key markets such as semiconductors, electronics, and transportation.

The deal with Blackstone is expected to close in the second half of 2024. Emerson plans to utilize the $2.9 billion after-tax cash proceeds from the transaction to reduce its existing debt obligations. Additionally, a wholly owned subsidiary of the Abu Dhabi Investment Authority and Singapore state fund GIC will invest alongside Blackstone as part of the deal.

Emerson disclosed that Davis Polk & Wardwell LLP served as its legal adviser, while Goldman Sachs & Co. LLC acted as the exclusive financial adviser for the transaction. This divestment marks another significant step in Emerson’s strategic realignment towards automation and its commitment to optimizing shareholder value.

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