Emerson Electric Co
EMR: XNYS (USA)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$997.00 | Wbbf | Lddfjfc |
Emerson’s Proposed Deal for NI All Comes Down to Execution, but There Are Clear Risks Involved
On Jan. 17, wide-moat-rated Emerson announced it has made an all-cash proposal to acquire narrow-moat National Instruments, or NI, for $53 per share. The proposal represents a 38% premium to NI’s 30-day volume-weighted average share price or a 23% premium to our NI fair value estimate. Emerson lost nearly 7% in market capitalization. We think the market’s reaction implies that the deal will close (NI’s stock price rose to $53 during the trading day), that Emerson will unsuccessfully extract little to no synergies, and a lower NI valuation on a standalone basis.