Emerson Electric (EMR) agreed to acquire the remaining shares of software provider AspenTech (AZPN), valuing the minority stake at $7.2 billion. With this deal, Emerson Electric is aiming for full control of AspenTech, marking a significant milestone in its portfolio transformation. Notably, Emerson currently holds around 57% of AspenTech’s shares after its 55% majority stake acquisition in 2022.Once the transaction is finalized, AspenTech will become a fully owned subsidiary of Emerson and will be delisted from the Nasdaq. Notably, Emerson currently holds around 57% of AspenTech’s shares.
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Following the announcement, Emerson shares declined by 1.24%. On the other hand, AZPN gained over 3%.
Emerson Reveals Key Transaction Details
According to the company’s statement, Emerson will buy shares of AspenTech it doesn’t own for $265 each in cash through a tender offer. After that, any remaining shares will automatically be bought by Emerson at the same price of $265 per share during a follow-up merger. This ensures Emerson gains full ownership of AspenTech. The company plans to fund the transaction using a combination of cash reserves and debt financing.
Interestingly, the $265-per-share offer reflects a 10.4% premium over the $240-per-share proposal made in November.
Furthermore, the company highlighted that this deal represents a significant step in reshaping its automation portfolio. It will further enhance Emerson’s evolution from an equipment maker to a leading industrial technology firm specializing in factory automation.
The deal is expected to be finalized in the first half of 2025, pending customary closing conditions.
Is Emerson Electric a Good Stock to Buy?
According to TipRanks’ consensus, EMR stock has a Moderate Buy rating based on 11 Buys, four Holds, and one sell rating assigned in the last three months. The average Emerson Electric share price target is $140.86, which is 9.2% above the current trading levels.
