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(Bloomberg) — Emerson Electric Co. is in talks over a combination with Aspen Technology Inc. to create an industrial software giant, according to people with knowledge of the matter.
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Emerson is discussing a deal to merge its software assets with Aspen Tech and gain majority control of the combined entity for its shareholders, the people said, asking not to be identified because talks are private. No final decisions have been made and talks may fall apart, the people said.
Aspen Tech would keep its own public listing, they said. Its management is planning to stay on after the transaction and run the combined software entity, one of the people said.
A representative for Emerson declined to comment. Aspen Tech didn’t immediately respond to a request for comment.
St. Louis-based Emerson rose as much as 3.5% after the close of regular trading, while Aspen Tech, based in Bedford, Massachusetts, climbed as much as 8%.
The deal would be Emerson’s latest in the software space, as it seeks to help customers use technology to monitor and digitize their operations. Last year, it agreed to buy Open Systems International for $1.6 billion. Emerson’s shares are up 19% this year for a market valuation of $57 billion.
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Aspen Tech, with a market value of about $8.4 billion, makes software for companies in industries such as chemicals, manufacturing, energy, metals and mining. It has previously considered a range of options, including a sale of all or part of the company.
The company has long been considered an attractive partner for big industrial companies looking to expand in software. Industrial firms have been shifting their focus from machinery to technology and automation in recent years.
(Updates with share gains in fifth paragraph)
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