International. Emerson announced a definitive agreement to sell its remaining interests in the Copeland joint venture (formerly Emerson Climate Technologies) for a transaction value of approximately US$3.4 billion.
Private equity funds managed by Blackstone will purchase 40% ownership of Emerson's common equity in the joint venture, while Copeland will repurchase the seller's note.
"This transaction is a key step in simplifying our portfolio and enhancing Emerson's focus as a global leader in automation," said Lal Karsanbhai, Emerson's chairman and chief executive officer. "We believe now is the right time to execute on 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 high-growth automation markets."
"We appreciate Emerson's partnership and are thrilled to enter into this agreement to acquire full ownership of Copeland," said Joe Baratta, global head of Blackstone Private Equity. "Copeland has a world-class team that is helping to lead the transition to more energy-efficient heating and cooling solutions and we are excited to continue supporting their accelerated growth in the coming years."
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 generate a net profit before taxes of approximately $200 million. Emerson intends to use after-tax cash proceeds to pay off its existing debt obligations.
A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and GIC will invest alongside Blackstone as part of the transaction.
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