Emerson Electric to Buy Out SPX's Stake in EGS Electrical

Emerson Electric (NYSE: EMR  ) will soon be in sole possession of a joint venture it has operated with SPX (NYSE: SPW  ) since 1997. Both companies announced in separate press releases Wednesday that Emerson will purchase SPX's 44.5% stake in EGS Electrical Group. The price is $571 million.

EGS is a manufacturer of specialty electrical goods for industrial and hazardous environments. It's widely dispersed around the globe, as its most significant markets are the U.S., Brazil, Canada, and France.

According to Emerson, more than half of EGS' total sales are derived from the oil, gas, and chemical markets. In its press release, the former company cited growth opportunities in these sectors as a key reason for its purchase.

Emerson expects the deal to be "slightly accretive" to its earnings per share in 2014. It said that EGS, which will become part of its industrial automation segment, posted annual revenues of more than $500 million in 2013. 

SPX anticipates it will book a Q1 2014 after-tax gain of roughly $300 million from the sale.

Both companies expect the deal to close in Q1 2014, pending approval from the relevant regulatory bodies.

link


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2753019, ~/Articles/ArticleHandler.aspx, 7/26/2014 2:07:26 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement