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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 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)
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