It is a hostile bid and is Emerson’s response to what it describes as “eight months of delay and lack of engagement” by NI to an acquisition offer worth $6.76 billion made in May last year, which was increased to the current offer in November last year during private correspondence between the two companies.
Frustrated by what it sees as NI board’s prevarication, Emerson has now gone over their heads to appeal directly to NI shareholders.
NI’s riposte is the initiation of a review and evaluation of its strategic options. NI’s announcement hints at interest from potential acquirers and other transaction partners, some of whom have already approached the company.
NI said it decided to pursue a “comprehensive review” that would include interest from other potential buyers, “rather than negotiate exclusively with Emerson, because NI believes that would be detrimental to shareholder interests.”
Emerson has its sights set on the fast-growing test and measurement sector’s TAM of $35 billion. It says the acquisition would enable Emerson to further expand and diversify its customer base within highly attractive end markets with strong secular trends including semiconductor, automotive and electric vehicles, and aerospace and defence.
“Although Emerson would have preferred to reach an agreement privately, given NI’s announcement that it is undertaking a strategic review, and after refusing to work with us toward a premium cash transaction over the past eight months, we are making our interest public for the benefit of all NI shareholders,” said Lal Karsanbhai (pictured), President and Chief Executive Officer of Emerson.
“Acquiring NI is another step forward in Emerson’s journey to develop a cohesive, higher growth and higher margin portfolio and build on its global automation focus. As Emerson outlined at our recent Investor Conference, we are transforming our portfolio toward higher-growth automation markets aligned with secular macro trends, which will deliver significant growth and profitability for years to come.”
Karsanbhai continued, “We have long admired NI and believe that combining its best-in-class electronic test and measurement product and software offerings with Emerson’s industry-leading automation technology and software would enhance our ability to bring comprehensive solutions to a diverse set of end markets, accelerating growth and positioning Emerson to create significant shareholder value. We stand ready to work immediately with NI’s Board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all NI shareholders.”
Emerson says that through the acquisition of NI, it would gain a strong, complementary portfolio of differentiated electronic test and measurement offerings and a technology stack of industry-leading intelligent devices, controls and software alongside Emerson’s technology stack in its core markets.
