Siemens Said Among Parties Interested in Emerson Power Unitby , , and
Emerson said to also get inquiries from private equity firms
St. Louis-based firm has considered network power unit spinoff
Siemens AG, Europe’s biggest engineering company, is among parties that have expressed preliminary interest in Emerson Electric Co.’s network power division, according to people familiar with the matter.
Emerson, which is exploring a spinoff of the unit, has fielded inquiries from the German industrial company and buyout firms, said the people, who asked not to be identified because the discussions are private. No final decisions have been made, Siemens may decide against pursuing a deal and St. Louis-based Emerson could still go ahead with a spinoff instead of a sale, the people said. It couldn’t be confirmed whether talks are ongoing.
Chief Executive Officer David Farr in June 2015 announced plans to spin off its network power division and explore options for other operations, including motors and drives, to focus on more profitable units.
Spokesmen for Siemens and Emerson declined to comment. Siemens shares fell 2.1 percent to 89.55 euros at 9:14 a.m. in Frankfurt, giving it a market capitalization of 76 billion euros ($86 billion).
Network power had sales of $4.4 billion and about 20,500 employees for the fiscal year ended September 2015, according to Emerson’s website. The unit provides equipment to support data centers used by banks and Internet companies, such as Facebook Inc.
Siemens in January unexpectedly raised its full-year profit outlook. Since taking the helm in 2013, Chief Executive Officer Joe Kaeser has sold a raft of businesses and made a flurry of acquisitions to focus Siemens on energy generation and distribution, while cutting more than 13,000 jobs.
Emerson shares have declined about 20 percent in the last two years, valuing the company at about $35 billion, compared with a more than 6 percent gain of the Standard & Poor’s 500 Industrials Index, which tracks 65 companies.