Simpson Thacher & Bartlett is advising Blackstone Inc. on the private equity firm’s agreement to buy a controlling stake in Emerson Electric Co.’s climate technologies unit.
Davis Polk & Wardwell is advising St. Louis-based Emerson in the deal, which values the climate business at about $14 billion and is expected to close in 2023’s first half.
Emerson will receive upfront, pre-tax cash proceeds of around $9.5 billion while keeping a 45% stake in the company, which sells Copeland brand compressors used in heating and cooling equipment, according to a statement.
The business, which also includes Emerson’s products and services for heating, ventilation, air conditioning and refrigeration, represents around $5 billion of sales in its 2022 financial year.
A wholly owned subsidiary of the Abu Dhabi Investment Authority and Singapore sovereign wealth fund GIC will invest alongside Blackstone as part of the transaction, the statement said.
Emerson said it plans to invest proceeds from the transaction to strengthen and diversify its automation portfolio in four targeted markets. It also plans to return cash to shareholders through share repurchases, expected to be around $2 billion in 2023, and its dividend.
Simpson Thacher said its team advising Blackstone includes M&A partners Elizabeth Cooper and William Allen, among others. Davis Polk said its team advising Emerson includes corporate partners Phillip R. Mills, Marc O. Williams, Brian Wolfe, and Cheryl Chan and associate Daisy Wu, among others.
To contact the correspondent on this story: Rick Mitchell in Paris at rmitchell@correspondent.bloomberglaw.com
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