Emerson considering sale of motor divisions

Report says Emerson is considering possible sale of two motor businesses.

03/22/2010


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According to a report in the St. Louis Business Journal on February 12, 2010, Emerson is considering the possible sale of two motor businesses after being approached by an interested buyer.


In a note to employees Feb. 3, Jim Lindemann, executive vice president of Emerson Motor Technologies & Appliance Solutions, said, "The inquiry from a potential strategic buyer specifically relates to the Commercial & Industrial Motors (CIM) and the Emerson Appliance Motors and Controls (EAMC) businesses." He emphasized that "Emerson has NOT made a decision to sell these motor and controls businesses."

The possible sales are in line with the stated intention of David Farr, Emerson's chairman, chief executive and president, to divest non-core businesses over the next five years. "We will be divesting, within the next two to three years, $1 billion, and within the next five years, $2 billion," Farr said at the company's annual investor conference on Feb. 5.The two businesses are part of Emerson's Appliance and Tools segment, one of five company segments. (The others four segments are Process Management, Industrial Automation, Network Power and Climate Technologies.)

According to the St. Louis Business Journal article, Emerson does not break out revenue for the Commercial & Industrial Motors and Emerson Appliance Motors and Controls divisions, but the larger Appliance and Tools segment accounted for about 14%, or $3.03 billion, of the company's total revenue of $20.9 billion in fiscal 2009, which ended Sept. 30. The 6,000 employees at the two divisions represent less than 5% of the company's more than 125,000 employees worldwide.

The overall Motor Technologies business that Lindemann heads produces electric motors used in residential, commercial, automotive and industrial applications. According to the St. Louis Business Journal report , Lindemann's note to employees also emphasized that the sale discussions do not include the company's Hermetic Motors, fan business or non-U.S. industrial motor businesses. In addition to appliances and tools, Emerson manufactures electronics and telecommunications equipment, industrial automation and process control systems, and heating, ventilating and air conditioning equipment. Control Engineering ran an article on switched reluctance motor systems in the March 2010 North America edition that prominently featured Emerson. That issue also included a "Product Exclusive" announcement of Emerson's new SR motor system.

Responding to a comment from a subscriber, consulting editor Frank Bartos, said, "The SR product introduction mentioned in the Control Engineering article is real.comprise a separate division of Emerson, any potential acquisition may or may not include SR technology, according to Emerson."

Control Engineering has a channel for motors and drives news and product announcements .

- Renee Robbins, senior editor, Control Engineering News Desk, www.controleng.com



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