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$8.2 Billion Emerson Buys National Instruments

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$8.2 Billion Emerson Buys National Instruments

(CTN News) – National Instruments (NATI) will be acquired by Emerson (EMR) for $8.2 billion, beating other suitors nearly a year after the company’s first unsuccessful bid.12

According to Reuters, Emerson beat other bids from Fortive Corp (FTV) and Keysight Technologies Inc (KEYS) for National Instrument shares.

Emerson is an American company that specializes in heavy engineering, software, and technology. A leading manufacturer of test equipment and software for engineers and scientists, National Instruments has its headquarters in Austin, Texas.

Three months ago, Emerson released a hostile bid for NI worth $7 billion after several unsuccessful attempts to acquire the company.

As early as May last year, Emerson approached NI with an offer of $48 per share. As a result of refusing to negotiate a premium cash transaction with Emerson, NI made their interest in the deal public “for the benefit of all NI shareholders.”2.

In intra-day trading, National Instruments shares rose 10% at 2 p.m. Eastern Time, reaching an all-time high of $57.20. Emerson shares were down about 1.3%.

Currently, Emerson owns 2.3 million shares of National Instruments, or about 2% of the company. Based on the weighted average price of prior transactions, the effective acquisition price for this transaction is $59.61 per share.

The National Institute conducted a comprehensive review

As a result, National Instruments initially hesitated to accept the offer. The company subsequently decided to pursue a “comprehensive review” that included interest from other possible buyers’ “rather than exclusively negotiate with Emerson, which NI believes would be detrimental to shareholder interests.”2

“We have been evaluating strategic options for the future of our business over the past several months with the intent to maximize the value of our business,” said NI’s Chief Executive Officer Eric Starkloff.

This is the best result for all NI stakeholders after running a comprehensive and robust process and considering a range of potential options.”1

Shareholders of National Instruments have good news to report

The agreement is good news for shareholders, who can expect healthy returns. A strong growth rate, attractive gross margins, and the potential for synergies to increase operating margins will all contribute to Emerson’s communication of its return targets.
A transaction between Emerson and NI has been approved by the boards of directors of both companies.

According to the agreement, NI shareholders will receive $60 per share in cash, representing a 49% premium over NI’s closing share price on January 12, the day before the strategic review was announced.

In the first half of Emerson’s fiscal 2024, the transaction is expected to close, subject to regulatory approval and shareholder approval.

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