Emerson software arm Aspentech merged in $11 billion transaction

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FILE PHOTO: Emerson Electric appears on the floor screen of the New York Stock Exchange (NYSE) on January 13, 2020 in New York, USA. Reuters / Brendan McDermid

11 October 2021

(Reuters) – Emerson Electric on Monday merged its software unit with smaller rival Aspen Technology for about $11 billion to launch an industrial automation business for a variety of sectors from utilities and mining to chemicals and automotive Can you declared support. ..

The integrated industrial software company includes Emerson’s grid modernization technology and geological simulation software as well as Aspentech’s software products for the mining, construction and pharmaceutical industries.

Lal Kalsanbai, CEO of Emerson, said:

“Our customers are increasingly looking for partners to help them achieve strong performance by automating workflows.”

Emerson said the merged entity’s software will also support sustainability needs in green energy markets such as biofuels, hydrogen and carbon capture.

The cash and stock transaction announced Monday is approximately $160 per share, and AspenTech shareholders will receive the $87 per share they currently hold and 0.42 shares of the merged company.

Bloomberg News first reported negotiations between the two companies, and that price is a nearly 27% premium from Aspentech’s closing price on October 6, before a nearly 13% premium to Friday’s stock closing price. Channel

Emerson also said that it owns 55% and that AspenTech shareholders will retain the AspenTech name and the rest will own the new company, which will be led by current CEO Antonio J. Pietri.

The transaction, which is expected to increase adjusted earnings from the prior year, is expected to close in the second quarter of 2022.

According to data from Refinitiv Eikon, AspenTech has a market capitalization of approximately $9.49 billion and Emerson has a market capitalization of over $57 billion.

(Reporting in Bangalore by Mrinmoy Dey, Shubham Kalia, Sanjana Shivdas, edited by Ramakrishnan M, Amy Caron Daniels, Uttaresh. V)

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