Emerson Acquires NI and Afag, Expanding Automation and Motion Software
Emerson pursues the expansion of its product range and global market reach through recent acquisition agreements with Afag Holding AG and National Instruments (NI).
In August of 2023, Emerson announced the penning of a definitive agreement to acquire Afag Holding AG (Afag), a provider of automated feeding and handling systems.
Another noteworthy strategic move is Emerson’s more recent acquisition of automated test and measurement solutions provider, National Instruments (NI). Through expanding its product and software offerings, Emerson seeks to establish itself as a market leader in factory automation, motion control, and test and measurement solutions.
Emerson seeks to position itself as a global leader in the development and provision of automation, motion control, and test and measurement solutions. Image used courtesy of Emerson
Afag and Emerson
By partnering with Afag, not only will Emerson be able to leverage the former company’s technological expertise, but it will also benefit from its diverse base of market representation. Afag has established a network of customers within the packaging, medical, automotive, battery manufacturing, life sciences, and electronics. This network provides a broader network for Emerson to showcase and sell products, expanding its global reach.
Two synergies will result from the Afag-Emerson agreement. First, Afag’s electric linear motion solutions will add to Emerson’s pneumatic motion control technology. The electric linear motion business adds over $9 billion of revenue to Emerson's supplied market and is forecast to increase in the mid-single digits yearly, sustaining Emerson's prolonged business growth. Second, Afag’s technological addition will grow Emeron’s factory automation business, worth $900 million.
Emerson acknowledges the ability of Afag’s technology to boost performance and energy efficiency, providing Emerson’s customers with unique solutions for their manufacturing processes.
The acquisition is expected to close at the end of Emerson’s 2023 financial year. The deal is dependent on closing conditions and is awaiting regulatory approval.
Emerson Completes NI Acquisition
Emerson has now finalized its takeover of NI at a book value of $8.2 billion. Emerson's agreement with NI is part of an investment strategy that not only strengthens the company's position as a worldwide automation leader, but also positions it to capitalize on important industry developments such as sustainability, near-shoring, and digital transformation.
Both NI and Emerson intend to drive innovation, performance improvement, and sustainability that will satisfy their consumers while building up shareholder value. Image used courtesy of Pixabay
Emerson plans to boost its earnings and footprint in major sectors, particularly the rapidly expanding industrial software industry, with the inclusion of NI's control, software, and smart device products. This transaction also boosts Emerson's gross earnings and provides significant margin expansion prospects through $165 million in monetary savings by year five, utilizing best practices inherent in the Emerson Management System.
The incorporation of NI into Emerson's new Test & Measurement division, led by Ritu Favre, highlights their dedication to promoting expansion, financial success, and resolving intricate test and measurement issues for their customers. Favre is the division’s newly appointed Business Group President, bringing over 30 years of technology experience, as well as customer relations and leadership experience to boot. Favre’s previous roles at NI include Senior Vice President and General Manager of the semiconductor business, and Executive Vice President of Business Units.
