By Dana Cimilluca
Emerson Electric Co. has made a roughly $27.5 billion takeover offer for Rockwell Automation Inc. that was rejected, according to a person familiar with the matter.
For months, Emerson has been stalking the Milwaukee-based maker of industrial equipment privately, making a $200-a-share bid in early August and another one valued at $215 a share -- half stock, half cash in early October, the person said, adding that both were rejected. Rockwell shares have been steady rising since the latter offer was made, and surged another 10% to $206.21 Tuesday morning after CNBC first reported the news.
It is not clear why Rockwell turned away the St. Louis conglomerate's advances. An Emerson spokesman confirmed that the company has made an offer for Rockwell, but would't say more. A Rockwell spokesman declined to comment but said the company would be issuing a statement.
Emerson sees $6 billion of synergies from the potential deal, the person said. Should Emerson succeed, which is far from guaranteed, the combined company would have a "center of excellence" in Milwaukee and include Rockwell's name, the person added.
Both companies specialize in making products used in the manufacturing process, but with specialties in different sectors. Emerson has largely been involved in the production of chemicals or other items made in outdoor facilities, while Rockwell has focused on manufacturing inside factories of products such as cars, food and appliances.
Andrew Tangel and Bob Tita contributed to this article.
Write to Dana Cimilluca at [email protected]