DEAL: Emerson’s $4 billion divestiture

Author: Amélie Labbé | Published: 7 Dec 2016

Complex divestitures are set to become more common as global businesses let go of non-core units to focus on higher growth activities, as shown by US industrial giant Emerson Electric’s latest carve-out.

The $4 billion sale of its Network Power business to a California investor closed in November 30. According to the company’s financial report for 2015, the unit’s sales and bottom line were down 12% and 50% year-on-year respectively as increased global competition trimmed profitability. The unit itself is the product of multiple add-on acquisitions undertaken over the past 20 or 30 years.

"Post-financial crisis that large companies and in particular large industrials – and the Emerson deal is no different – are reassessing the business and focusing on what is core to their strategy," said Baker & McKenzie M&A...