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Rockwell goes on a German shopping spree

01 February, 2002

Rockwell Automation has bought a pair of German companies operating in sectors in which it wants to expand. One is the German safety relay and electronics manufacturer, Tesch; the other is a specialist in information systems for the pharmaceutical industry and other regulated sectors, Propack Data.

Tesch, which has a staff of about 60 and occupies two sites in the Wuppertal area, will form part of Rockwell`s expanding machine safety portfolio, alongside its UK subsidiary EJA. Rockwell is not planning any management changes following the takeover.

"Tesch has a solid reputation for its product technology throughout Europe, and a passion for excellence," says Keith Nosbusch, president of Rockwell`s Control Systems operation. "The availability and credibility of the company`s advanced safety relays, dedicated function monitoring relays, and other product technologies, complement our safety growth initiatives."

Propack supplies nine of the world`s top ten pharmaceutical manufacturers. Rockwell chief executive Don Davis describes the acquisition as strategic and says that it will make Rockwell`s Global Manufacturing Solutions business a preferred supplier to the pharmaceuticals industry. "It also expands our reach into the $50bn manufacturing information market, serving other industries such as food and beverage, life sciences and cosmetics," he adds.

Propack, which employs about 230 people, has offices in the UK, France, Italy, Switzerland and the US, as well as in Germany.

Rockwell Automation`s results for the final quarter of 2001 reveal that while the US market seems to be stabilising, its European business is now suffering, with control system sales down 11% for the quarter. However, Michael Bless, Rockwell`s chief financial officer, singles out the UK as one of a handful of European countries that are showing signs of stabilising and growing, having entered the downturn earlier than others such as Germany and Switzerland.

Addressing analysts, Bless said that the market conditions were hitting Rockwell`s European competitors "hard", resulting in "a very difficult pricing environment" in Europe. He added that, in some cases, Rockwell is having to turn down business because there is not enough margin in it. "We`re not taking business that is not profitable."

Although there are signs that the US recession is levelling off, there are no such signs in Europe. "I`m not sure we have reached the bottom point," Bless said.

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