$5.2bn Emerson sales to fund acquisitions
On Tuesday, Emerson agreed to sell its Network Power division, which includes data centre cooling brand Liebert, in a $4bn deal. The same day the company agreed to sell its French drives and motors business Leroy-Somer and UK-based drives company Control Techniques.
According to Bloomberg, Emerson is now looking to expand the refocused company through acquisitions and “strategic investments”.
Emerson will retain a minority stake in its Network Power business following the sale to Platinum Equity and a group of co-investors.
With revenue of approximately $4.4bn in 2015, Network Power, based in Columbus, Ohio, is described as a leading provider of thermal management, AC and DC power, transfer switches, services and information management systems for the data centre and telecommunications industries.
“This agreement marks a major milestone in the strategic portfolio repositioning we announced last June,” said David N Farr, chairman and chief executive officer of Emerson.
Earlier on Tuesday, Emerson had agreed the $1.2bn sale of its Leroy-Somer and Control Techniques business units to Nidec Corporation. Leroy-Somer was acquired by Emerson in 1990 and Control Techniques in 1995. The two businesses have a combined turnover of $1.7bn.
In third quarter 2016 financial figures, also released on Tuesday, Emerson announced that its Climate Technologies division, which includes Copeland compressors, experienced a net sales drop of 2%, with underlying sales down 1%, allowing for currency translations. This, however, held up well against group sales which dropped 7%, with underlying sales down 5%.
Emerson Climate Technologies saw underlying sales in North America growing by 2%, with both US air conditioning and commercial refrigeration growing low single digits. Europe performed even better with sales rising by 4%, reflecting growth in both the air conditioning and refrigeration businesses.
Sales in Asia decreased 11%, reflecting weak demand conditions across the region.
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