Emerson comments on D.E. Shaw’s presentation and letter to board

Emerson comments on D.E. Shaw’s presentation and letter to board
Published: 20 October 2019 - 3 a.m.
By: Martin Menachery
Emerson confirmed receipt of a letter to Emerson’s board of directors and presentation from D.E. Shaw.

Emerson has a strong track record of operational excellence and actions to enhance shareholder value. Since completing its repositioning in 2016, Emerson has grown both of its platforms at above market growth rates, increased its consolidated revenue at an 8% compounded annual growth rate, generated operating cash flow of more than $8 billion, and three-year TSR of 47%. Over the last five years, Emerson has divested over $6 billion in annual revenue, including Network Power, Control Techniques, and Leroy Somer. Emerson also has a long history of returning capital to shareholders, including $10 billion in share repurchases over the past 10 years and 62 consecutive years of dividend increases.

On 1 October, Emerson announced that it is conducting a comprehensive review of operational, capital allocation and portfolio initiatives to enhance shareholder value and position the Company for both near- and long-term success. The evaluation is being led by Emerson’s Board, supported by a leading consulting firm and legal and financial advisors.

Emerson chairman and chief executive officer David N Farr said: “Emerson was one of the first industrial companies to address concerning trends in the macroeconomic environment, and we have announced increased restructuring actions since May to proactively manage our cost structure. The Board of Directors has been focused on this issue over the course of the year and concluded that a thorough review will inform decisions that drive strong value creation for our shareholders in what we expect to be an uncertain environment.”

“Emerson maintains an open dialogue with all shareholders and welcomes their input on potential opportunities to enhance shareholder value,” said Clemens AH Boersig, lead independent director, Emerson. “We will carefully evaluate D.E. Shaw’s proposals as we continue to assess value-creation opportunities.”

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