When it comes to the Industrial Internet, the critical path to success is often is at the PLC or Industrial Controls. Emerson (News - Alert) has taken Digital Transformation to heart and per the website:
“…has boldly transformed itself to create value for our customers and shareholders. With our newly energized focus on our two core business platforms — Automation Solutions and Commercial & Residential Solutions — we can confront the challenges of an increasingly complex and unpredictable marketplace from a position of strength. This allows us to drive both near- and long-term value. And retain our single-trusted-partner status with the process, industrial, commercial and residential industries.”
That also means that they have been aggressive in addressing market needs with acquiring solutions that match the opportunities. For example, they acquired LocusTraxx and PakSense when they wanted to enhance their solutions for Food Management and Cold Chain.
Rockwell Automation (News - Alert) has a tremendous legacy and history, of which they are proud, including “The Company’s first patented product was a carbon disc compression-type motor controller for industrial cranes. The crane controller was demonstrated at the St. Louis World’s Fair in 1904.” Additionally, the company has a benevolent history starting the charity that eventually became the United Way.
And they see themselves as Market Leaders per their website:
“Rockwell Automation, the world’s largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Throughout the world, our flagship Allen-Bradley and Rockwell Software® product brands are recognized for innovation and excellence.”
Now logically, Emerson’s overture makes sense. Emerson has a market cap of almost $38B while Rockwell is at $25B. However, while the stockholders of Rockwell see their shares at almost $200, while Emerson is very stable near $60, there might be some trepidation.
On principle this would be a very strong merger with lots of opportunities to expand services their clientele. IMHO, both companies are strong, but not analogous in industrial controls with Emerson having more process material handling abilities and Rockwell having more industrial controllers.
I can understand why Rockwell Automation wants to stand alone, but as IIoT continues to heat up, both companies are capable of adapting to the digital transformation and would do well in maintaining their market share. Together, they could increase their opportunities in a variety of vertical markets.