Emerson to sell power transmission business to Regal-Beloit

• 9 years ago (2014-12-15)
• Junior Isles

North America 998

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Emerson Electric Co. has announced a $1.44 billion cash deal with Regal-Beloit Corp. to sell its power transmission solutions business.

The Wall Street Journal had last week reported that the two companies were nearing a deal, as Emerson had been considering strategic options for the $600 million revenue-making business earlier this year.

The deal, comprising of $1.4 billion in cash and assumption of certain post-retirement liabilities, would include Emerson's manufacture of coupling, bearing and gearing components, which sell under such brands as Browning, Kop-Flex, Rollway and Sealmaster.

Emerson's chairman and CEO, David Farr, said that the power transmission business no longer fitted with the "strategic direction" of Emerson's core business strategy. In his statement he went on to say: "This transaction allows us to better focus on our value creation priorities and provides Regal-Beloit with a unique opportunity to strengthen and grow its mechanical power transmission segment."

The deal is said to be a significant statement of intent by Regal-Beloit, which has around $3 billion of market capitalisation (compared to Emerson's $40 billion).