Emerson Doubles Down on Automation: $3.5B Copeland Sale Fuels Strategy Shift

Zinger Key Points
  • Emerson Electric sells its 40% stake in Copeland JV to Blackstone for about $3.5 billion.
  • Emerson said now is the right time to execute plans to fully exit the Copeland business.

Emerson Electric Co. EMR has agreed to sell its remaining stake in the Copeland joint venture (formerly Emerson Climate Technologies) for about $3.5 billion.

The deal includes pre-tax cash proceeds of $3.4 billion after accounting for releasing $0.1 billion in future indemnity obligations.

Private equity funds managed by Blackstone Inc. BX will acquire Emerson’s 40% common equity stake in the joint venture, and Copeland will repurchase the seller’s note.

Emerson’s Board of Directors has unanimously approved the sale, expected to close in the second half of 2024, pending regulatory approvals.

The deal is anticipated to yield a net pretax gain of $0.2 billion. Emerson plans to use the $2.9 billion after-tax proceeds to reduce debt.

Lal Karsanbhai, President and Chief Executive Officer of Emerson said, “This transaction is a key step to simplify our portfolio and enhance Emerson’s focus as a global leader in automation. 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.”

Last month, Emerson reported that second-quarter net sales surged 17% YoY, surpassing estimates, with underlying sales up 8% Y/Y in the quarter.

Investors can gain exposure to the stock via ProShares S&P Kensho Smart Factories ETF MAKX and Gabelli Automation ETF GAST.

Also Read: These Analysts Revise Their Forecasts On Emerson Electric Following Q2 Results

Price Action: EMR shares are up 0.97% at $107.00 premarket at the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image sourced from Shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: EquitiesLarge CapNewsAsset SalesAI GeneratedBriefsStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!