By Nathan Gomes
(Reuters) -U.S. industrial conglomerate Emerson Electric Co said on Wednesday it will buy measurement tools maker NI Corp for $8.2 billion in a bid to boost its automation capabilities.
The $60-per-share cash offer represents a premium of 14.1% to NI stock’s Tuesday close.
The purchase will allow Emerson to tap NI’s software-connected automated test and measurement systems for higher growth and margins in its automation portfolio.
“These capabilities provide Emerson industry diversification into attractive and growing discrete markets like semiconductor and electronics, transportation and electric vehicles,” Emerson Chief Executive Officer Lal Karsanbhai said.
Emerson has executed a string of deals over the last few years to streamline itself into an industrial automation provider. Last year, it sold a majority stake in its climate technologies unit to Blackstone Inc in a deal that valued the business at $14 billion.
The NI deal is expected to close in the first half of Emerson’s fiscal 2024.
“With the $60 per-share bid accepted, a prolonged takeover from EMR has been averted which we see taking pressure off of shares that have been weighed down by concerns around a potential bidding war,” said Jonathan Sakraida, equity analyst at CFRA Research.
NI’s shares rose 9.5% to touch a record high of $57.59, while Emerson’s shares fell more than 1% to $83.47.
Texas-based NI launched a formal sale process in January after Emerson threatened to challenge its board if it did not engage in deal negotiations. Emerson dropped its hostile bid once an auction for NI got underway.
Reuters reported on Tuesday that Emerson had prevailed over rival bidders including Fortive Corp and Keysight Technologies Inc with its $60-per-share bid.
Goldman Sachs & Co LLC and Centerview Partners LLC were financial advisers to Emerson on the deal, while Davis Polk & Wardwell LLP was its legal adviser.
(Reporting by Nathan Gomes in Bengaluru; Editing by Savio D’Souza, Devika Syamnath and Shounak Dasgupta)
