Emerson Electric Co (EMR) is set to join forces with rival Aspen Technology (APN) in a merger deal worth $11b. The combined industrial software company will boost the automation business by combining Emerson’s grid modernization technology and geological simulation software with Aspen’s software expertise in the mining, manufacturing, and pharmaceutical sectors. Emerson’s market capitalization is valued at more than $57b, while Aspen’s is at $9.5b.
The cash and stock deal will see Emerson owning 55% of the new company. Aspen’s shareholders will receive $87 and 0.42% shares of the new entity for each share they currently own. Overall, the deal is for about $107 per share, implying a premium of 27% to Aspen’s shares. After the merger was announced, Aspen’s shares jumped more than 10% on the Nasdaq.
why it matters
The merger between Emerson Electric Co and Aspen Technology highlights customers' increasing demands for an efficient and effective integrated system to automate their workflow.