Rockwell Automation rejected Emerson Electric's sweetened $29 billion takeover offer. Fred Katayama reports.
A big brush-off in the industrial automation business. Rockwell nixed a sweetened $29 billion takeover bid from rival Emerson Electric. It says the offer undervalues the company and a merger would dampen its growth prospects. Shares of Rockwell fell on the news. Emerson traded higher. Oppenheimer's Noah Kaye says Rockwell's decision makes sense. (SOUNDBITE) NOAH KAYE, EXECUTIVE DIRECTOR, SENIOR RESEARCH ANALYST, OPPENHEIMER & CO. INC. (ENGLISH) SAYING: "For us, the real question from here is, if Rockwell is to go on its own, how will it continue to outgrow the markets. Clearly, they're going to have to deploy more capital for M&A. They have about $2.5 billion in cash and short-term investments on hand. So, we're going to be looking at what kind of investments they are making to outgrow the automation markets and scale this connected enterprise." Rockwell is a leader in so-called discrete automation that helps assemble parts to make cars, appliances and computers. Emerson's strength is in process automation, which helps power plants and factories in sectors such as mining and cement operate more efficiently. Emerson says the two firms would be better off together, but Rockwell has defended its standalone strategy.