You are here

Siemens approaches Emerson to buy network power unit

siemens.jpg
Siemens AG has approached Emerson Electric Co to explore acquiring the network power business that the US factory automation equipment maker is looking to shed for as much as US$4 billion, people familiar with the matter said.

[NEW YORK] Siemens AG has approached Emerson Electric Co to explore acquiring the network power business that the US factory automation equipment maker is looking to shed for as much as US$4 billion, people familiar with the matter said.

A potential deal would allow Emerson to focus on its core industrial automation businesses, as well as its commercial and residential heating and air conditioning divisions, by selling network power in one fell swoop rather than spinning it off.

Emerson is in early-stage conversations with Siemens about divesting the business which makes power systems for data centers, the people said on Monday.

Emerson, which said last June it would seek to spin off the network power business and explore options for its remaining non-core portfolio, is also talking with private equity firms about pursuing a transaction, including Platinum Equity LLC, the people added. Other companies have also expressed interest, according to the people.

sentifi.com

Market voices on:

There is no certainty over which course of action Emerson will pursue and no deal is likely until later this year, the people said, asking not to be identified because the negotiations are confidential.

Siemens did not respond to a request for comment, while Emerson and Platinum Equity declined to comment.

The remaining non-core portfolio that Emerson has been looking to sell includes its motors and drives, power generation and remaining storage businesses. Collectively, these assets generate around US$200 million in annual earnings before interest, taxes, depreciation and amortisation, sources have previously told Reuters.

St Louis, Missouri-based Emerson has seen its earnings hurt recently by a strong dollar and a drop in oil prices, which have curtailed spending by customers in the energy industry. Other peers, such as General Electric Co and Rockwell Automation Inc, have also been hit by weak oil prices.

Siemens' healthcare, transportation and energy-management units, on the other hand, have benefited greatly by the weak euro and ongoing cost cuts.

REUTERS

Powered by GET.comGetCom