* ABB buys Austrian maker of production control systems
* ABB's largest buy since $3.9 bln Thomas & Betts deal in
* Purchase strengthens ABB in faster growing industrial
* ABB had looked at buying Rockwell - source
(Adds shareholder comment)
By John Revill and Oliver Hirt
ZURICH, April 4 Swiss engineering group ABB
has bought Austrian industrial automation company
Bernecker & Rainer, a move that fits in with its strategy of
expanding its products to better challenge German rival Siemens
on the factory floor.
ABB gave no purchase price for Bernecker & Rainer
Industrie-Elektronik (B&R) when it announced the deal on
Tuesday, but a person familiar with the matter said it was
nearly $2 billion, the biggest deal under Chief Executive Ulrich
Spiesshofer's four-year leadership.
ABB had considered other targets in industrial automation,
including U.S. firm Rockwell Automation, before deciding
on B&R, according to a person familiar with the matter. ABB
spokesman Saswato Das declined to comment or confirm the
The Swiss company said the acquisition would increase its
sales in industrial automation to around $15 billion by adding
B&R's annual sales of more than $600 million.
It would also consolidate ABB's No.2 position in the $130
billion processing and industrial sector behind Siemens
but ahead of rivals such as Emerson, Rockwell
Automation and General Electric.
B&R makes programmable controls for machines used by
companies including Nestle, Procter & Gamble and Roche.
The private company, founded by two electrical engineers in
1979, also makes components for machines used by automakers BMW,
Daimler and Volkswagen. Its products include industrial PCs and
factory automation devices designed to increase productivity.
ABB's largest shareholder, Investor AB which holds a 10.48
percent stake according to Reuters data, welcomed the deal.
"As we see it, this is a very important, strategically sound
acquisition which clearly strengthens ABB’s position in factory
automation," spokesman Stefan Stern said.
"It is important for ABB to continue to work with internal
efficiency and at the same time invest for the future within
ABB's second-largest investor Cevian Capital, which
campaigned for a break-up of ABB last year, declined to comment.
Shares in ABB were up 0.9 percent.
The Swiss company, which depends on oil and gas for around
15 percent of its revenue, has been hit as low oil prices have
dented demand from oil producers for products such as
temperature and pressure transmitters and flow measurement
Takis Spiliopoulos, an analyst at Bank Vontobel, said global
corporate spending on industrial automation is expected to grow
by around 5 to 6 percent annually in the years ahead as Western
companies bring back production from emerging markets, while oil
and gas spending would remain subdued.
"This is a sensible acquisition, increasing ABB's footprint
on the factory floor where we expect higher growth in the future
than in process industries like oil and gas," Spiliopoulos said.
Spiesshofer said the B&R purchase would make ABB the only
industrial automation provider offering customers the entire
spectrum of technology and software solutions around
measurement, control, actuation, robotics, digitalisation and
"There will be more acquisitions ... as one of the drivers
of growth going forward, but there is no 'must haves' we are
desperate about," Spiesshofer told reporters. "We are closing
today perfectly the big gap we had in machine and factory
automation, that was one gap we were always concerned about and
wanted to close."
ABB aims to increase B&R's annual sales to above $1 billion
from around $600 million now and said the business would add to
operating earnings per share from the first year.
The purchase is being funded from ABB's own cash and is
expected to close by mid-year.
(Additional reporting by Johannes Hellstrom; Editing by Michael
Shields and Susan Fenton)