Emerson to receive $9.5 billion upfront for sale of stake in climate technology business; beat 4Q earnings expectations

Shares of Emerson Electric Co.
EMR,
+1.76%

rose 0.7% in premarket trading after the technology and software automation company confirmed on Monday an agreement to sell a majority stake in its climate technology business to Blackstone Inc.
BX,
+0.68%

in a deal that values ​​the business at $14.0 billion. There was a deal originally reported according to The Wall Street Journal. Under the terms of the agreement, Emerson will receive $9.5 billion in upfront cash. Upon closing of the deal, which is expected to occur in the first half of 2023, Emerson will receive a $2.25 billion note and retain a 45% ownership stake in the autonomous climate technology business. Separately, Emerson reported net income for the fiscal fourth quarter that increased to $740 million, or $1.24 per share, from $670 million, or $1.11 per share, in the same period last year. Excluding one-time items, adjusted earnings per share of $1.53 beat the FactSet consensus of $1.39. Sales rose 8.3% to $5.36 billion, beating the FactSet consensus of $5.34 billion. The stock is down 3.0% in the past three months through Friday, while the S&P 500
SPX,
+2.46%

lost 5.6%.