Rockwell Automation rejects $29bn proposal from Emerson

Rockwell Automation, Inc., rejected rival Emerson Electric Co’s takeover offer, stating the $29bn bid undervalued the industrial automation company.

Rockwell Robotics
Rockwell Automation questioned the strategic rationale for a merger with Emerson.

As reported, Rockwell Automation said its board of directors was unanimous in concluding that Emerson’s latest offer — about $2bn higher than a previous proposal — was “not in best interests of the company and its shareowners.”

Earlier this month, Emerson outlined a plan for a combined “Emerson Rockwell” that will maintain a significant presence in Milwaukee and become an “automation center of excellence.”

Rockwell yesterday (22 November) questioned the strategic rationale for a merger, according to Reuters.

Rockwell chief executive Blake Moret said: “A combination with Emerson would dampen, not enhance, the ability to grow in the evolving industrial automation and information market.

“Bigger is not always better for driving growth and value creation.”

Rockwell is an American leader in discrete automation, helping assemble component parts to make automobiles, household appliances and computer systems. Brands include Allen-Bradley and Rockwell Software.

Emerson’s strength is in process automation, which helps power plants and factories in sectors including mining and cement operate more efficiently.

Reuters reported that St. Louis-based Emerson’s latest offer values Rockwell at $225 per share, split between $135 in cash and $90 in Emerson shares.

Shares of Rockwell fell 1.2% to $191 in premarket trading on Wednesday, with Emerson shares were slightly higher.