USA: Rumoured to be under pressure from investors, Emerson has said it will conduct “a comprehensive review” of its operational, capital allocation and portfolio initiatives.
Emerson says its board will lead the evaluation, which will be supported by a leading consulting firm and independent legal and financial advisors.
The news follows unconfirmed reports that US hedge fund company D E Shaw & Co is building a stake in Emerson and planning to push for a split of its automation business from its commercial and residential solutions interests, which includes Copland compressors and Alco controls for the refrigeration and air conditioning industry.
Emerson’s automation business is the larger of the two divisions, accounting for around 65% ($11.4bn) of total sales of 17.4bn in 2018.
“Following discussions with our board and management team over the course of this year, we have concluded that a thorough review of our cost structure, capital allocation, and portfolio will inform decisions that drive strong value creation for our shareholders in what we expect to be an uncertain environment,” said chairman and CEO David Farr.
“While we remain positive on Emerson’s end markets, we anticipate a challenging geopolitical and economic landscape over the next couple of years. We are focused on ensuring we are well positioned to successfully drive outperformance and shareholder value,” said Farr.