As part of the deal, Emerson’s transmission and distribution platform OSI and its Geological Simulation Software businesses were merged with AspenTech with an aim to create a global industrial software major with a workforce of over 3,700 located in 62 offices, spread across 41 countries
Emerson completes $11bn merger deal with AspenTech. (Credit: Raysonho @ Open Grid Scheduler / Grid Engine / Wikimedia Commons)
Emerson Electric has closed the previously announced $11bn merger of its industrial software businesses with Aspen Technology (AspenTech), a Massachusetts-based provider of software and services for the process industries.
The deal, which was announced in October 2021, involved Emerson’s OSI and its Geological Simulation Software (GSS) business.
OSI is a transmission and distribution platform, which helps digitise and modernise electric grids.
Geological Simulation Software is a subsurface modelling and dynamic simulation software. It will now be renamed Subsurface Science and Engineering (SSE).
The aim of the merger is to create a global industrial software major, which will operate as AspenTech. The enlarged industrial software company will now have a workforce of over 3,700 located in 62 offices, spread across 41 countries.
The new firm is expected to provide customers with a differentiated industrial software portfolio with the capabilities for optimising the complete asset lifecycle across a variety of industry verticals.
AspenTech president and CEO Antonio Pietri said: “We believe OSI and GSS customers will realise significant value in partnering with AspenTech and benefit from our 40-year history of innovation and software leadership in capital-intensive industries.
“Particularly for those companies in the early phases of digitalisation, AspenTech can guide them through their journey, leveraging our expertise from helping revolutionise the oil and gas and chemical industries.”
Emerson will hold a 55% stake in new AspenTech, while shareholders of old AspenTech will own the remaining stake of 45%. Shares of the new firm will trade on NASDAQ.
As part of the closing of the deal, Emerson has contributed cash of $6bn to AspenTech, which will be received by the latter’s shareholders in exchange for the former’s controlling stake.
Additionally, Emerson and AspenTech have forged an enhanced commercial partnership to enable the latter to penetrate new and existing markets.
Emerson president and CEO Lal Karsanbhai said: “Today marks a significant milestone for Emerson and is a testament to our commitment to continue building a higher growth, more diversified portfolio.
“Together with new AspenTech, we expect to realise significant revenue and cost synergies, while having the platform and flexibility to strategically deploy capital for growth through continued investment and M&A.”