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Emerson (EMR) to Divest Russia Business to Local Management

Zacks Equity Research
·2-min read

Emerson Electric Co. EMR recently entered into an agreement to divest its Russia business to the local management team. The financial terms of the transaction were kept under wraps.

The businesses to be sold include EMR’s Russia-based manufacturing subsidiary Metran and Emerson LLC in Russia, the sales and service organization for Metran.

Emerson generated 1.5% of revenues from its Russia business in fiscal 2021. Due to the divestiture, EMR included a pre-tax loss of $162 million in the third quarter of fiscal 2022. The divestment is pending regulatory and government approvals, and other customary closing conditions.

In the recent past, industrial companies like Crane Holdings CR and Altra Industrial Motion Corp. AIMC also divested their non-core business to focus on the key growth areas.

In August 2022, Crane Holdings divested Redco Corporation, a subsidiary holding all asbestos liabilities and related insurance assets, to the long-term liability management company Spruce Lake Liability Management Holdco. At the close of the transaction, CR paid approximately $550 million in cash to Redco, while Spruce Lake made a capital contribution of $83 million.

By removing all asbestos-related liabilities and obligations from Crane Holdings’ balance sheet, the transaction increases its annual free cash flow and aids in long-term value creation for its stakeholders.

In April 2022, AIMC completed the divestment of its Jacobs Vehicle Systems (JVS) business segment to Cummins Inc. The all-cash transaction was valued at $325 million.

The divestiture is in sync with Altra Industrial’s strategy to restructure its business portfolio. This transaction enabled AIMC to heighten focus on its highly engineered products in the power transmission and motion control markets.


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