Emerson to exit Copeland JV in $3.5 billion deal with Blackstone

(Reuters) -Emerson said on Thursday it had agreed to sell its remaining stake in its Copeland joint venture to Blackstone in a $3.5 billion deal, as the U.S. industrial firm further streamlines its business to sharpen focus on automation.

Private equity funds managed by Blackstone would purchase Emerson's 40% equity ownership in the joint venture, Emerson said.

"We believe now is the right time to execute our plans to fully exit the Copeland business. This agreement with Blackstone provides certainty and portfolio simplification to Emerson shareholders," CEO Lal Karsanbhai said.

The Copeland JV was established after Emerson struck a $14 billion deal to sell a majority stake in its Climate Technologies unit to Blackstone in October 2022, as part of an effort to establish itself as a major player in the global automation industry.

Since then, Emerson has deepened its push into automation through deals such as the $8.2 billion takeover of measurement equipment maker National Instruments, which helped it capture key markets like semiconductors, electronics and transportation.

Emerson said on Thursday it expects the deal to close in the second half of 2024, adding that it would use the $2.9 billion after-tax cash proceeds from the deal to pay down its existing debt obligations.

A wholly owned subsidiary of the Abu Dhabi Investment Authority and Singapore state fund GIC would invest alongside Blackstone as part of the transaction.

Davis Polk & Wardwell LLP served as legal adviser and Goldman Sachs & Co. LLC served as the exclusive financial adviser to Emerson, the company said.

(Reporting by Deborah Sophia in Bengaluru; Editing by Anil D'Silva and Alan Barona)