(Reuters) – Emerson Electric Co is selling a majority stake in its climate technologies unit to Blackstone Inc, the U.S. industrial firm said on Monday, in a deal that values the unit at $14 billion.
Emerson will receive upfront, pre-tax cash proceeds of about $9.5 billion, while retaining a non-controlling ownership interest in a new standalone joint venture, the company said.
The deal would give Blackstone a 55 per cent stake in the unit.
Blackstone and co-investors would contribute $4.4 billion in equity toward the deal, which would be supplemented by $5.5 billion of debt financing, Emerson said.
There has been an uptick in private equity deals this year, caused by a drop in valuation of those companies amid a broader equities selloff, triggered by an economic downturn..
The Blackstone deal, earlier reported by the Wall Street Journal, comes as Emerson accelerates its software strategy that aims to capture the increasing shift among companies to automate their operations to offset a shortage of factory workers.
The manufacturing giant has reshuffled its businesses across segments and geographies in the recent times, after announcing an $11 billion merger of its software units with rival Aspen Technology Inc last year.
As part of that pivot, Emerson in August also sold its unit that makes waste disposal equipment and hot water dispensers to Whirlpool Corp.
The Blackstone deal is expected to close in the first half of 2023.
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