By Nathan Gomes
(Reuters) -Emerson Electric on Tuesday proposed to buy the rest of AspenTech that it does not own at a valuation of $15.1 billion, as the company looks to sharpen its focus on industrial automation.
The company in 2021 merged its software units with smaller rival Aspen Technology (NASDAQ:AZPN) and took control of about 55% of the combined entity.
Emerson (NYSE:EMR) offered $240 per share in cash for the rest of the industrial software technology provider on Tuesday, and would pay about $6.53 billion for the stake, according to a Reuters calculation.
AspenTech announced the receipt of the bid and said its board would review the proposal.
Shares of AspenTech closed up 1.4% at $241, while those of Emerson ended 7.2% higher at $117.67.
Emerson, founded a century ago, has streamlined its portfolio over the past few years to focus on technology as companies modernize their factory floors to include more automation.
"Emerson Electric's move to gain full ownership of AspenTech does not surprise us," said CFRA Research Jonathan Sakraida.
Sakraida noted that labor issues following the pandemic and a string of union strikes this year likely have manufacturers keeping automation at the top of their minds.
The transaction is not subject to any financing condition, the company said, but Emerson will not proceed with the deal unless a special committee, including directors appointed by AspenTech and advised by independent legal and financial advisers, recommends it.
Emerson has also started to explore options, including a cash sale for its Safety & Productivity unit, which comprises businesses not related to its automation portfolio. The segment contributed $1.4 billion of sales in fiscal 2024.
The company said it expects its 2025 profit per share to be between $5.85 and $6.05, the midpoint of which is above analysts' average estimate of $5.89, according to data compiled by LSEG.
Emerson will buy back about $2.0 billion of its common stock in fiscal year 2025, with about $1.0 billion expected to be completed in the first quarter.