Emerson Electric Concedes to Activist Fund, Appoints Mark Blinn to Board
D.E. Shaw has called for a breakup to Emerson Electric.
Emerson Electric, a U.S. factory automation company, has appointed Mark Blinn to its board of directors. Blinn is the former CEO of Flowserve. His appointment expands the company’s board to 11 members. The decision comes after pressure from activist hedge fund D.E. Shaw.
“Mark Blinn is an accomplished operating executive whom we identified and believe will be a valuable addition to the Emerson Electric Board,” said Edwin Jager, Managing Director of D. E. Shaw. “As long-term shareholders, we appreciate Mark’s willingness to serve as a director, and appreciate the Board’s responsiveness to our concerns and engagement efforts.”
Meanwhile, the hedge fund owns a little more than 1% of the automation company. It has also called for it to break into two businesses. The first would be its industrial automation business. The second would be a climate-tech organization.
“We welcome these constructive actions from the company and believe they will enhance the board’s composition, its accountability to shareholders and the alignment of management incentives with shareholder returns,” D.E. Shaw said in a statement.
Would Emerson Breakup Produce Shareholder Value
Meanwhile, there’s a good reason why D.E. Shaw wants to break up Emerson Electric into two companies. The activist fund thinks a deal would unlock more than $20 billion in value for its shareholders.
Finally, D.E. Shaw has been a shareholder of Emerson Electric for four years. The hedge fund manages $29 billion in alternative investments. In September, we reported that Emerson was building a stake in the company. Furthermore, the fund reportedly pushed for a $7 billion buyback in Emerson stock.
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