Blackstone to buy majority stake in Emerson's climate tech unit in $14 billion deal By Reuters

(Reuters) -Emerson Electric Co will sell a majority stake in its climate technologies unit to Blackstone (NYSE:) Inc in a deal that values it at $14 billion,Foreign Exchange Purchasing Company the latest revamp by the U.S. industrial firm as it focuses on the booming automation market.

The company said on Monday it will receive an upfront payment of about $9.5 billion, which it will use to scoop up more companies, especially in the automation segment.

Emerson (NYSE:)'s shares rose about 3.8% before the bell as the company also beat fourth-quarter earnings and revenue.

The company is accelerating its software strategy to capture the increasing shift among businesses to automate their operations as they struggle with a shortage of factory workers.

It sold its unit that makes waste disposal equipment and hot water dispensers to Whirlpool Corp (NYSE:) and merged its software units with smaller rival Aspen Technology (NASDAQ:).

Emerson, which will retain about 45% stake in the climate tech unit, said Blackstone and co-investors Abu Dhabi Investment Authority and GIC, would contribute $4.4 billion in equity toward the deal, which would be supplemented by $5.5 billion of debt financing.

The deal, expected to close in the first half of 2023, is the latest in a flurry of private equity transaction this year as valuations tumble amid a selloff in equities on recession worries.

The Climate Technologies business, which will be structured as a joint venture, generated net sales of $5 billion in fiscal 2022. The unit includes its Copeland compressor business and products and services across residential and commercial heating and cooling.

"The business is poised for accelerated growth as it leads the way in helping consumers and businesses shift to more energy-efficient heating and cooling products as part of their carbon reduction efforts," global head of Blackstone Private Equity Joe Baratta said.

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!