Moody's puts Emerson on review for downgrade

Moody's Investors Service said it placed Emerson Electric Co.’s A2 senior unsecured debt rating and Prime-1 short term rating under review for downgrade.

The review for downgrade is prompted by the company's announcement that it plans to merge two of its software businesses with industrial software provider Aspen Technologies, Inc. Under this plan, Emerson will contribute OSI Inc. and the Geological Simulation Software business to AspenTech to create a new industrial software company.

Emerson will also contribute $6 billion in cash to new AspenTech, which will be received by AspenTech shareholders, in exchange for a 55% stake in new AspenTech.

Emerson intends to fund the cash contribution almost entirely with new debt.

Emerson expects to close the transaction in the second calendar quarter of 2022, Moody’s said.

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