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Rockwell buys Samsung`s controls business

01 May, 2002

Rockwell Automation is buying the controller division of the Korean conglomerate Samsung and will use it as the basis for a new business called Rockwell Samsung Automation. Rockwell chief executive Don Davis says that the new operation will act as "the nucleus for our future commercial and operational expansion in the Asia-Pacific region".

The business will create and manufacture technologies for products such as drives, PLCs, distributed I/O and motion controls. It will bring together personnel from Rockwell`s existing Korean business with those from Samsung`s controller business.

The acquisition builds on an alliance between the two companies formed in 1999. Under the deal, Samsung Electronics will give the new company a licence to sell products under the Samsung name in Korea. Samsung has also agreed to buy automation products from Rockwell as preferred products for its own manufacturing operations.

The acquisition "combines the strengths of both companies and enhances our competitive position in the Asian industrial automation industry," says Davis, adding that the strength of the Samsung name will give Rockwell an opportunity to expand its Korean operations.

Craig Resnick, director of hybrid manufacturing research with the ARC Advisory group, says that the deal will give Rockwell access to a large industrial market that would be difficult and expensive for any non-Korean company to penetrate. It will also "allow Rockwell to add lower cost engineering and manufacturing expertise" for the cost-sensitive Asia-Pacific market.

From Samsung`s point of view, the deal will also allow the Korean conglomerate to automate its factories and to use globally supported automation equipment in their OEM products at a lower cost than buying the equipment directly from Rockwell or a rival.

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