Rockwell Price Triggers New Round of Rumors

July 10, 2008
An Independent Rockwell Is More Valuable Than It Would Be Either Merged or Acquired

Rumors of a possible bid for Rockwell Automation resurfaced last month as the stock dipped towards its 52-week low of $50. The price reflects investor and analyst suspicions that Rockwell, along with other automation vendors, will suffer as the economic woes build up in both the U.S. and Europe. Rockwell’s own assertion back in April that it could expect an upturn in Europe and steady market conditions in North America had already drawn the observation from one analyst, Nick Heymann of Sterne Agee, that “These guys are flying magic carpets.”

Although other vendors have been mentioned as possible targets, Rockwell seems to be top of the list because of its combination of a lacklustre stock price, a broad range of products and its presence in more than 80 countries, said a Chicago Tribune report. Meanwhile Rockwell president and CEO Keith Nosbusch continues to argue that an independent Rockwell is more valuable than it would be either merged or acquired.


Most frequently named suitors are still ABB and Siemens, although both might face anti-trust problems and are in any case in the throes of various top-level management crises. Also being mentioned as a possible acquirer is Yokogawa, though Jim Pinto argues that the Japanese don’t know how to do large scale acquisitions.

Not everyone is convinced by these arguments, however. Automation World editor Gary Mintchell, for example, worries about being dubbed a Rockwell cheerleader, but nevertheless argues in his Feed Forward blog ( that Nosbusch “knows exactly what he’s doing,” and that Kevin Roach’s Rockwell Software “are one of the few software companies in this space that is really moving forward.” Mintchell concludes that “those who dismiss Nosbusch and Rockwell do so at their own peril.”

In a way of course, that’s the whole point, Gary. If Rockwell is as good as you say, despite our disagreement over the significance of its current process initiatives, then the stock price can’t help but put it in the frame.