Emerson to Sell Majority Stake in Climate Technologies Unit to Blackstone for $14B

Emerson Electric will sell a majority stake in its Climate Technologies business to private equity funds managed by Blackstone for $14 billion.

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

The deal would give Emerson upfront, pre-tax cash proceeds of about $9.5 billion and a note of $2.25 billion at closing.

The company will retain a 45% non-controlling ownership stake in the new standalone business, which will be structured as a joint venture until its potential sale or IPO.

The cash consideration will be paid by $5.5 billion of fully committed debt financing and $4.4 billion of equity contribution from Blackstone.

The Climate Technologies unit includes the Copeland compressor business and the entire portfolio of products and services across all HVAC and refrigeration end-markets, representing approximately $5 billion of fiscal 2022 sales.

As a part of the deal, a fully-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) will invest along with Blackstone.

Emerson also expects to continue to return cash to shareholders through share repurchases, expected to be around $2 billion next year, and its dividend.