LONDON (ShareCast) - (Sharecast News) - Emerson confirmed that it has agreed to sell a majority stake in its climate technologies business to private equity funds managed by Blackstone in a $14bn deal.
The company said on Monday that it will receive upfront, pre-tax cash proceeds of about $9.5bn, while retaining a non-controlling ownership interest in a new standalone joint venture.

The standalone climate technologies business includes the Copeland compressor business and the entire portfolio of products and services across all HVAC and refrigeration end-markets, representing approximately $5bn of fiscal 2022 sales.

Emerson said that as a pure-play automation company, it will be positioned "for higher growth, with strong, differentiated capabilities to help customers pursue their sustainability and productivity objectives in process, hybrid and discrete industries".

The company plans to invest proceeds from the deal in strategic M&A to strengthen and diversify its automation portfolio in four targeted adjacent markets, which will be discussed at the investor conference on 29 November. Emerson also expects to continue to return cash to shareholders through share repurchases, expected to be around $2bn in 2023, and its dividend.

Emerson president and chief executive Lal Karsanbhai said: "Today's announcement is a definitive step in the portfolio journey we embarked on when I became CEO in early 2021.

"Over the past 18 months, the Emerson team has accelerated our portfolio transformation, divesting non-core businesses including InSinkErator and Therm-O-Disc, while investing in organic growth opportunities and important transactions including AspenTech.

"Our differentiated capabilities in intelligent devices and software, and the focus, cohesiveness and operating agility of a pure-play company, will allow Emerson to bring our comprehensive automation products and solutions to a diverse set of end markets."

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