What is the main purpose of this debt issuance?

The primary purpose of issuing these notes is to raise approximately $2.98 billion in net proceeds to help fund Emerson's contribution of roughly $6 billion to existing stockholders of Aspen Technology, Inc. as part of the acquisition transaction.

What happens if the AspenTech acquisition does not go through?

The notes include a 'Special Mandatory Redemption' provision. If Emerson does not complete the AspenTech transaction by October 10, 2022, or if the company decides not to pursue or terminates the transaction, Emerson will be required to redeem all outstanding notes at 101% of their principal amount plus accrued interest.

When will the proceeds from the note offering be available?

The closing of the transaction is expected to occur on December 21, 2021, and the notes are expected to be issued on that date. The net proceeds will then be available for use.

EMR 8-K: Material Agreements

Q: What are the interest rates and maturity dates for the new notes?

The notes have the following terms: $1 billion of 2.000% Notes due 2028, $1 billion of 2.200% Notes due 2031, and $1 billion of 2.800% Notes due 2051.

Summary

Emerson Electric Co. (EMR) announced on December 8, 2021, that it has entered into a material definitive agreement to issue $3 billion in aggregate principal amount of notes across three tranches: $1 billion of 2.000% Notes due 2028, $1 billion of 2.200% Notes due 2031, and $1 billion of 2.800% Notes due 2051. The offering is being conducted under the company's existing shelf registration statement and is expected to close on December 21, 2021. The primary purpose of this debt issuance is to fund a portion of Emerson's approximately $6 billion contribution to existing stockholders of Aspen Technology, Inc. (AspenTech) as part of the previously announced merger transaction. This highlights a significant use of capital to facilitate a major strategic move, underscoring the company's commitment to the AspenTech acquisition. Investors should note the specific terms and interest rates for each note series, as well as the potential for a Special Mandatory Redemption if the AspenTech transaction is not completed.

Key Highlights

1Emerson Electric Co. is issuing $3 billion in aggregate principal amount of notes.
2The notes are split into three series: $1 billion of 2.000% Notes due 2028, $1 billion of 2.200% Notes due 2031, and $1 billion of 2.800% Notes due 2051.
3The offering is being made under the company's automatic shelf registration statement filed on Form S-3.
4The expected closing date for the note issuance is December 21, 2021.
5Net proceeds of approximately $2.98 billion are expected to be used to fund a portion of the $6 billion contribution to AspenTech stockholders related to the merger.
6A 'Special Mandatory Redemption' clause is included, requiring the redemption of notes if the AspenTech merger is not completed by October 10, 2022, or if certain other conditions related to the termination or non-pursuit of the transaction occur.
7The underwriting is being handled by Goldman Sachs & Co. LLC and Citigroup Global Markets Inc.

EMERSON ELECTRIC CO 8-K Report, Material Agreement (Dec 9, 2021)

Summary

Key Highlights

Frequently Asked Questions