Emerson To Merge Software Businesses With AspenTech For $11B

Emerson Electric announced on Monday, October 11, it would merge its software units with smaller rival Aspen Technology in a deal for about US$11 billion, reported The Wall Street Journal.

The combined industrial software company will comprise Emerson’s grid modernization technology and geological simulation software, and AspenTech’s software offerings to mining, manufacturing, and pharmaceutical industries.

“We saw an attractive opportunity to accelerate our software strategy to capitalize on the rapidly evolving industrial software landscape,” Emerson CEOe Lal Karsanbhai said.

“Our customers are increasingly seeking partners to help realize stronger performance as they automate workflows.”

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

The cash-and-stock deal, announced on Monday, is for about US$160 per share, and AspenTech shareholders will receive US$87 and 0.42 share of the combined company for each share they currently own.

The price implies a premium of about 27% to AspenTech’s close on October 6, before Bloomberg News first reported talks between the two companies, and about 13% to the stock’s last close on Friday.

Emerson also said it would own 55% and AspenTech shareholders will own the rest in the new company that will retain AspenTech’s name and will be led by current Chief Executive Officer Antonio Pietri.

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