Emerson announced that it has signed an agreement to acquire SPX Corporation's 44.5 percent minority interest in EGS Electrical Group, giving it 100 percent ownership of the business. Emerson and SPX have jointly held the business since 1997, with Emerson responsible for operational management and consolidation of results in its Industrial Automation segment. The business had annual revenues in 2013 of more than $500 million.
"We are excited for EGS to become a wholly-owned business of Emerson," said Chairman and Chief Executive Officer David N. Farr. "Emerging opportunities with our
As a global manufacturer of electrical products for commercial, industrial, hazardous and adverse environments, EGS' technologies are highly regarded in their markets for durability, safety and quality. Although EGS serves a wide range of markets, its oil, gas and chemical participation has grown to more than half of total sales.
"Historically, EGS has been a high-quality, niche market participant, with sales concentrated in North America," Farr said. "As oil, gas and chemical market opportunities have developed, the potential for growth by leveraging Emerson's strong Process Management and international channels has become increasingly attractive, and can be best achieved under full Emerson ownership."
The transaction is expected to close within two months, subject to required regulatory approvals. EGS sales and earnings will continue to be consolidated in the Industrial Automation segment, while SPX's noncontrolling interest in earnings of EGS will cease. Emerson expects the transaction to be slightly accretive to earnings per share in 2014. The purchase price will be $571 million.