Emerson proposes $15 billion buyout to acquire remaining AspenTech stake

Home
Industry News
Emerson proposes $15 billion buyout to acquire remaining AspenTech stake

Emerson proposes $15 billion buyout to acquire remaining AspenTech stake

Industry News
Nov 06,24

Under the new proposal, Emerson would pay $240 per share in cash, amounting to around $6.53 billion for the stake it does not own.

Emerson proposes $15 billion buyout to acquire remaining AspenTech stake

Emerson Electric Co. has made a $15.1 billion offer to acquire the remaining 45% of Aspen Technology (AspenTech) that it does not already own, aiming to bolster its focus on industrial automation. In 2021, Emerson merged its software division with AspenTech, gaining control of 55% of the combined company.

Under the new proposal, Emerson would pay $240 per share in cash, amounting to around $6.53 billion for the stake it does not own. AspenTech confirmed receipt of the offer, stating that its board would evaluate the proposal.

Following the announcement, AspenTech shares rose 1.4% to $241, while Emerson's stock surged 7.2% to $117.67. Emerson, with a century-long history, has streamlined its operations in recent years to emphasise technology, aligning with a trend toward automation as industries upgrade their manufacturing processes.

Analysts, including Jonathan Sakraida, Research, CFRA see the move as unsurprising given the current focus on automation amid labour challenges post-pandemic and recent union actions. Emerson has also begun exploring options for divesting its Safety & Productivity unit, which does not align with its automation focus and contributed $1.4 billion in sales in fiscal 2024.

Emerson projects a profit per share of $5.85 to $6.05 for 2025, exceeding analysts' average estimate of $5.89. The company also announced plans to repurchase $2 billion of its stock, with $1 billion expected to be bought back in the first quarter of fiscal 2025.

(Reuters)