My phone exploded yesterday afternoon with news. Emerson initiating a hostile takeover fight for NI (formerly National Instruments). Right now the figure on the table is $7.6 billion. According to my scanning of the news from a number of outlets, NI is developing a “poison pill” to avoid the takeover.
That latter makes sense to me. NI stopped emphasizing automation applications of its technology several years ago. News sources said Emerson was interested in NI’s test technology and “technology stack”. In other words, Emerson would strip NI of what makes the company unique, suck up some technology, probably devalue LabView since it’s not compatible to Emerson’s control technology.
I don’t see the value here, just like I didn’t think the attempted takeover of Rockwell Automation a few years ago made sense. I thought there was no way Emerson could merge the Rockwell culture into its own. Maybe Emerson thinks the industry is still consolidating and that would be a gigantic consolidation?
NI’s market is not Emerson’s market. I’m not even sure it is adjacent, exactly. How much would this assist the drive toward industry consolidation? Where would this help in the global competition toward size among ABB, Schneider Electric, and Siemens?
Is this action just another example of corporate hubris of which we’ve seen plenty in the past decades?
We’ll see how this dance ends. I’d personally hate to see NI go away. I’ve always liked the company’s culture of technology and innovation. And great people. Not that I have anything against Emerson. But I don’t see the $7 billion in benefits resulting from the acquisition. I did tell a CEO whom I was interviewing yesterday, though, “I am not a financial analyst.” I am a student of strategy. Wonder where this strategy will lead.