Emerson Electric to Acquire Ericsson's Energy Systems
Ericsson (Sweden) recently announced that it has agreed to sell its Energy Systems business to Emerson Electric Co. (St. Louis, MO). Under terms of the transaction, which is expected to close in the second quarter 2000, Emerson will pay approximately $725.0 million in cash.According to Ericsson, the Energy Systems business, which is headquartered in Stockholm, employs about 2,200 people globally, with activities in 20 countries, mainly in Europe, Latin America and Asia. According to Ericsson, the sale includes all Energy Systems activities except those regarding dc/dc power modules, which will join Ericsson Microelectronics. The company claims expected 1999 revenue for Energy Systems are about $500.0 million."Ericsson's sale of its Energy Systems operations is in line with the company's overall strategy, to focus on the convergence of mobility and Internet communication," said Kurt Hellstrom, president of Ericsson. "Energy Systems is a good profitable operation and has been an important provider of power to Ericsson's telecom equipment for more than 100 years and will continue as an even stronger energy systems partner with Ericsson in the years to come.""Being a part of Emerson Electric, Energy Systems will be able to expand its product portfolio and reach new markets, thus strengthening its leadership in energy systems for telecom applications," said Sigrun Hjelmquist, president of Ericsson Components Group. "I am convinced that we have found the very best partner for Energy Systems. Together with Emerson's resources, a new dominant player for energy systems to the New Telecoms World can be created."Chairman and CEO of Emerson, Charles F. Knight said, "Today's (January 18, 2000) acquisition accelerates our efforts to reposition Emerson in fast-growing markets, such as telecom equipment. With the addition of Ericsson Energy Systems, Emerson will be uniquely positioned to take full advantage of the enormous global demand. It expands our presence in key world markets, our role in wireless telecommunications power and our role as a solutions and service provider."