Per a Bloomberg report, Emerson Electric Co. EMR is in talks with Blackstone Inc. to sell a part of its commercial and residential solutions business. A potential deal between the two parties could be valued in the range of $5-$10 billion, contingent upon how much the portfolio changes hands. However, the report stated that the decision has not been finalized and that discussions might fail to materialize.
The discussions arise at a time when the housing market is experiencing weakness due to the U.S. Federal Reserve’s tightening monetary policy and interest rate hikes. Emerson’s Commercial and Residential Solutions business unit comprised 42.6% of total revenues in the third quarter of fiscal 2022.
Emerson and Blackstone have refrained from commenting on the reports.
Emerson Electric Co. Price
Emerson Electric Co. price | Emerson Electric Co. Quote
Emerson, presently carrying a Zacks Rank #3 (Hold), has been focusing on restructuring its portfolio and divesting non-core/non-profitable businesses. Recently, the company entered into an agreement to divest its Russia business, including Russia-based manufacturing subsidiary Metran and Emerson LLC in Russia, the sales and service organization for Metran, to the local management team.
In August, EMR entered into a deal to sell its InSinkErator business to Whirlpool Corporation WHR for $3 billion. Emerson acquired InSinkErator, a manufacturer of food waste disposers and instant hot water dispensers for home and commercial use, in 1968.
Subject to regulatory approvals and other customary closing conditions, the deal is expected to close in Emerson’s 2023 fiscal year.
InSinkErator’s leading consumer brand preference, a large installed base and its expansion into new markets and product offerings are expected to boost revenues for Whirlpool. The acquisition is expected to add approximately $1.25 to WHR’s earnings in fiscal 2023. Upon the transaction’s closing, InSinkErator is expected to operate as a separate entity within WHR’s North American region.
Whirlpool’s chairman and CEO, Marc Bitzer, said, “The acquisition is a clear accelerator of our ongoing portfolio transformation and aligned with our stated goals of investing in high-growth and high-margin businesses and Win Americas.” Whirlpool currently carries a Zacks Rank #4 (Sell).
Key Picks
Some better-ranked stocks in the Manufacturing – Electronics industry are as follows:
Energous Corporation WATT currently carries a Zacks Rank #2 (Buy). The company pulled off a trailing four quarter earnings surprise of 8.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
Energous has an estimated earnings growth rate of 23.1% for the current year. Shares of the company have gained 7% in the past three months.
Eaton Corporation ETN presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 1.4%, on average.
Eaton has an estimated earnings growth rate of 14.1% for the current year. Shares of the company have gained 11.5% in the past three months.
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Emerson Electric Co. (EMR) : Free Stock Analysis Report
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