Shares of Emerson Electric are down by 0.11% to $55.50 in mid-day trading today.
The technology and engineering solutions provider said the spinoff is designed to help streamline Emerson's portfolio, drive growth and increase shareholder value.
Emerson said it will also be conducting a review and assessment of its corporate services and structure to bring them into order with the company's smaller scale and sharper focus.
"As a publicly traded company, Network Power will be the world's leading, stand-alone provider of thermal management, A/C and D/C power, transfer switches, services and infrastructure management systems for the data center and telecommunications industries," Emerson said in a statement.
"Creating two, independent companies will position both businesses to continue as leaders and to pursue distinct strategies to drive profitable growth. Emerson and Network Power will each have sharper strategic focus, enabling both companies to better allocate resources, incentivize employees and allocate capital to capture the significant long-term opportunities in their respective markets,"company CEO David Farr said in a statement.
The spinoff is expected to be completed by September 30, 2016.
Separately, TheStreet Ratings team rates EMERSON ELECTRIC CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMERSON ELECTRIC CO (EMR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows weak operating cash flow."