Keeping an Eye on Technology Futures, No Hidden Agendas, New Attitudes, No Platitudes!
Most automation companies showed reasonable growth & profit in 2006, a turnaround from leaner years. Emboldened by better results, many of the majors are seeking new growth opportunities, and some good-sized acquisitions will occur in 2007.
In 2006 Rockwell divested Reliance, which was engaged primarily in old businesses such as motors, bearings and gears, and will utilize the money to fuel growth in new technology businesses. Honeywell and Emerson are doing fairly well and will likely acquire smaller companies that fit their wireless strategies, plus some larger mid-size players to strengthen their portfolios.
ABB is doing well consistently and its stock is climbing again. Now the company may fuel growth with judicious acquisition choices. Someone on the JimPinto.com weblog suggested that Rockwell (perhaps the old PLC business embodied by Allen-Bradley) was an ABB acquisition candidate.
After divesting the more profitable companies in the group, Invensys has recovered from its bout with bankruptcy. Foxboro, Wonderware and allied process controls businesses are now the central focus.
Aggressive French giant Schneider is busy buying many mid-size pieces, putting together its bid for significance in a fragmented automation marketplace. It is evident that, unlike Siemens' mishandled US acquisitions, Schneider is managing its newly acquired brood remarkably well.
The Japanese Omron and Yokogawa continue to look for growth and market leadership. Because the Japanese don't really understand how to make acquisitions, they will only attempt smaller buyouts, and most of their expansion will come through strong growth in the Far East.
By the end of this decade, look for the automation big-10 list to shrink to about half that size. 2007 will bring the first of the major buyouts to start the reshuffle.
