Emerson Electric to sell climate tech business to Blackstone

The deal values the unit at $14 billion.

  • According to terms of the deal, Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion
  • Emerson is a global technology and software company
  • The transaction is expected to close in the first half of 2023

Emerson Electric has agreed to sell the majority stake of its climate tech unit to Blackstone. The deal values the unit at $14 billion.

According to terms of the deal, Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion while retaining a non-controlling ownership interest in a new standalone joint venture.

The standalone climate tech business includes the market-leading Copeland compressor business and the entire portfolio of products and services across all HVAC and refrigeration end-markets.

On the deal, Joe Baratta, global head of Blackstone Private Equity, said in a statement, “Blackstone has a long and successful track record of large-scale corporate partnerships, a key pillar of our investment strategy. This is a marquee transaction for our private equity business and a testament to our ability to deliver solutions to our partners even in difficult economic and market environments.”

The transaction is expected to close in the first half of the calendar year 2023.

As part of the transaction, Emerson will sell ownership of its St. Louis, Missouri campus to the joint venture. Emerson will enter a three-year lease on the headquarters with an option to extend a further two years.

Centerview Partners LLC and Goldman Sachs & Co. LLC are serving as financial advisors to Emerson, and Davis Polk & Wardwell LLP is serving as legal counsel. Barclays served as lead financial advisor to Blackstone. Guggenheim Securities, LLC and Evercore also provided financial advisory services to Blackstone.

Emerson is a global technology and software company.

Blackstone has $951 billion in assets under management.