(Reuters) -Emerson Electric Co said on Monday it would merge its software units with smaller rival Aspen Technology in a deal for about $11 billion, boosting its industrial automation business that caters to a swathe of sectors ranging from utility and mining to chemicals and automotive.
The combined industrial software company will comprise Emerson’s grid modernization technology and geological simulation software, and AspenTech’s software offerings to mining, manufacturing, and pharmaceutical industries.
“We saw an attractive opportunity to accelerate our software strategy to capitalize on the rapidly evolving industrial software landscape,” Emerson Chief Executive Lal Karsanbhai said.
“Our customers are increasingly seeking partners to help realize stronger performance as they automate workflows.”
Emerson also said it would own 55% and AspenTech shareholders will own the rest in the new company that will retain AspenTech’s name and will be led by current Chief Executive Officer Antonio Pietri.
The deal, which is expected to be accretive to adjusted earnings after the first year, is expected to close in the second quarter of 2022.
AspenTech has a market capitalization of about $9.49 billion, while Emerson is valued at more than $57 billion, according to Refinitiv Eikon data.
(Reporting by Mrinmay Dey, Shubham Kalia and Sanjana Shivdas in Bengaluru; Editing by Ramakrishnan M, Amy Caren Daniel and Uttaresh.V)