Will Emerson sell Leroy-Somer and CT to a Chinese buyer?
Two Chinese companies and a private equity group are among the potential bidders for Emerson Electric’s Motors and Drives business, according to a report from the Reuters news agency. Emerson announced last year that it was exploring “strategic alternatives” for the business, which includes the UK-based drives-maker Control Techniques and the French motor manufacturer Leroy-Somer, as part of a plan to streamline its portfolio and to drive growth. Reports suggest that Emerson wants to sell the business – potentially worth around €1bn – within the next few months.
According to Reuters, one potential bidder is the Chinese company Wolong Electric, which claims to be China’s largest motor-maker. It already owns the Austrian-headquartered motor manufacturer ATB, whose brands include Brook Crompton, Schorch, Laurence Scott, Morley, Tamal and Nordenham. Wolong has set itself the goals of becoming “the Eastern Siemens” and world’s leading motor supplier.
Also in the running for the Emerson business is the US/UK private equity group Clayton Dubilier & Rice, one of whose partners, James Berges, is a former president at Emerson, where he led corporate growth and development activities and was responsible for the motors and appliance components, industrial automation, and network power businesses. CD&R already owns several industrial companies, including Rexel, Atkore and Spie.
Other names that have been suggested as potential buyers of the Emerson business include the acquisitive Japanese motor-maker, Nidec, Brazil’s WEG, the US motor manufacturer, Regal Beloit, as well as another Chinese motor-maker, Harbin Electric.
Because of Leroy-Somer’s role as a supplier to the French military and automotive sectors, the French government may need to approve its sale.