By Senad Karaahmetovic
Private equity giant Blackstone (NYSE:BX) has agreed to acquire a majority stake in Emerson's (NYSE:EMR) climate-technology business for $14 billion, including debt, according to Wall Street Journal.
Blackstone will own 55% of Emerson's unit, which develops products used in commercial and residential heating. The unit has around 18,000 employees and posted about $5 billion in sales during fiscal 2022.
The deal would mark the biggest private equity deal in months amid the slump in activity due to difficult macro conditions.
The deal will include $5.5 billion in debt financing, while Blackstone will invest $4.4 billion in equity. The rest of the price would include equity Emerson's equity as well as a $2.25 billion seller note.
"I think it will take at least six months for the credit market to normalize, and we will continue to transact in this market. We like to invest in these moments. This is when you can do interesting things," said Joseph Baratta, global head of private equity at Blackstone.
During the most recent earnings call with analysts, the company's management hinted that Blackstone could pull out a big deal like this sooner rather than later.
"If anyone can get a financing done somewhere, it's us, and I think you’ll see some examples of that in the not-too-distant future," said Jonathan Gray, Blackstone’s president.
Emerson shares are up over 1% in pre-market Monday.