Emerson pulls bid for Rockwell Automation
Emerson Electric Co. on Tuesday withdrew its offer to buy Rockwell Automation Inc. after Milwaukee-based Rockwell rejected Emerson’s three buyout attempts.
“We are disappointed that the Rockwell board refused even to discuss the potential combination of our two great companies,” Emerson Chief Executive David Farr said in a statement.
“Instead of engaging in constructive dialogue, the Rockwell board decided to let this unique and value-generative opportunity go unexplored,” Farr said.
Earlier this month, Emerson sweetened its bid for Rockwell to $29 billion. But Rockwell rejected it, saying the $225-a-share offer presented “significant long-term risk” for its shareholders and would create a company that’s not well-positioned to compete successfully in an evolving market.
Rockwell has resisted Emerson’s takeover attempts not just because of disagreements over price but also for technology reasons.
If Emerson had acquired Rockwell, it could have been a blow to Milwaukee if it pulled Rockwell’s headquarters out of the city’s south side.
A global manufacturer of industrial controls equipment, Rockwell is a $6 billion company with 22,000 employees worldwide and its headquarters at 1201 S. 2nd St.
Emerson offered $200 per share for the company in August. It then raised its
offer twice, to $215 per share and $225 per share, but was turned down.
Last week, Rockwell President and CEO Blake Moret repeated his objections to the takeover proposal and added some new arguments against combining the companies into one $23 billion enterprise.
“Bigger is not always better for driving growth and value creation. While Emerson may see this proposed acquisition as necessary to enhance its growth and earnings potential and expand its capabilities in the industrial automation and information market, Rockwell does not,” Moret said in a letter to Farr.
In a statement Tuesday, the company said, “We thank our shareowners for their input and support, our employees for their focus and dedication, and our partners and customers for their continued confidence in Rockwell Automation throughout this process.”
Emerson said it might be interested in some assets of General Electric Co.
“Clearly, the Rockwell opportunity is dead, and we’re moving on,” Farr said on a conference call with analysts.
He said Emerson plans to accelerate share repurchases over the next month and buy back up to $1 billion of its shares over the next 12 months.
Rockwell says its business strategy has generated strong financial returns, including 14% adjusted earnings per share growth in 2017.
Emerson has lagged Rockwell’s performance, and its share price has fallen since the company’s offers to acquire the Milwaukee company have become public.
Tuesday, Rockwell shares closed at $197.13, up 3.2%. Emerson shares closed at $64.15, up 3.7%.