Emerson Electric (NYSE:EMR) has decided to sell a 55% stake in its climate-technologies business to Blackstone (NYSE:BX) in a transaction worth $14 billion including debt, according to the Wall Street Journal. The stock, which has already climbed in the past month on expectations of this announcement, is on the rise in pre-market trading.
Based in the U.S., Emerson Electric Co. designs and produces engineering and technology products for industrial, commercial, and consumer markets globally.
With the deal, Emerson aims to streamline its business operations and enhance its focus on its technology and automation businesses.
Per the terms of the expected deal, Blackstone and its co-investors would finance $4.4 billion, with the remaining $5.5 billion coming from debt financing. Upon completion, Emerson will hold a 45% stake in the climate business.
Emerson Electric has been on a reshuffling spree. A year ago, the company merged its software units with rival Aspen Technology in a transaction worth $11 billion.
Is EMR Stock a Buy?
As per TipRanks, analysts are cautiously optimistic about the stock and have a Moderate Buy consensus rating, which is based on five Buys and six Holds. Emerson Electric’s average price forecast of $94.36 implies 7.96% upside potential.
Ending Thoughts
Shares of Emerson have gained almost 20% over the past month in anticipation of divestiture news.
The company is slated to release its fourth-quarter Fiscal 2022 results on November 2, before the market opens. On the earnings call, management is expected to shed more light on the future course of action.
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