Emerson to Buy Remaining Shares of AspenTech for US$7.2 Billion, Allowing Emerson to More Effectively Compete in the Manufacturing Digital Transformation Space

At the end of January, Emerson and AspenTech announced that Emerson had agreed to acquire all outstanding stock not already owned by the company for US$7.2 billion, with Emerson already owning 57% of the company, following the 55% it acquired back in 2022 for US$6 billion. AspenTech will become a wholly-owned subsidiary of Emerson and cumulatively represent a US$13.2 billion investment by Emerson, which is even larger than Siemens’ significant investment of US$10.6 billion to acquire Altair in October of 2024. (See a recent ABI Insight (IN-7599) for more information on the Altair acquisition).

AspenTech offers process manufacturers a broad range of software solutions across asset performance management, automation management tools such as Manufacturing Execution Systems (MES) and Advanced Process Control (APC), process simulation, digital twins, industrial data fabric offerings, and well and reservoir solutions for the Oil & Gas (O&G) industry. The company is also actively stamping its mark on the industrial automation space, offering a range of process optimization and predictive tools across its portfolio, alongside an Artificial Intelligence (AI) copilot, the Aspen Virtual Advisor (AVA), which is supporting operator decision-making when using the customer’s APC solution, DMC3. The tool provides answers to process control questions and suggests control actions, helping to avoid manual and error-prone human actions, and freeing up engineering resources. Furthermore, operators can more effectively identify relationships between Aspen DMC3’s multi-variables, supporting optimization processes.

Many traditional automation hardware companies have recently been bulking up their software portfolios through acquisitions to drive their competitive positioning by bringing digital transformation to manufacturing customers. Siemens acquired Altair to augment its simulation offerings and Rockwell Automation acquired Verve for US$190 million in October 2023 to improve its cybersecurity posture. Emerson is looking to follow suit by bringing AspenTech fully into the fold, with Emerson Chief Executive Officer (CEO) Lal Karsanbhai stating in a press release upon the completion of the acquisition of AspenTech that the full integration of the company into Emerson will “advance [its] vision for software-defined control.” Emerson has already made strides in its positioning for software-defined automation, with the company’s Boundless Automation platform allowing for the construction of a hyperconverged infrastructure, reducing the need for traditional control hardware architectures and allowing for containerized and easy scaling. Leveraging AspenTech’s deep process vertical experience, strong AI capabilities, and software-based portfolio will allow Emerson to begin to more aggressively compete with Siemens, Rockwell Automation, and Schneider Electric, which have been more aggressive initially in developing and expanding their software suits to augment hardware offerings.

Augmenting Emerson’s automation portfolio with AspenTech’s offerings, especially those tailored for O&G and chemical manufacturers, cannot come soon enough, with not only stiff competition from Western vendors, but also Eastern competitors. Notably, SUPCON, a Chinese automation company headquartered in Hangzhou, released in June 2024 a Universal Control System (UCS), Nyx. Nyx is a software-defined control system that allows customers to move away from traditional control system architecture and eliminate the need for control cabinets. NyxOS is a Real-Time Operating System (RTOS) that runs control services in a containerized environment. The solution leverages Advanced Physical Layer (APL) technologies, supporting high-speed transmission of fully digitalized data from the field to the control layer and beyond. By transmitting data through high-speed fiber-optic networks, Nyx eliminates the need for a large number of control cabinets and reduces the need for copper cables by up to 80%, lowering costs and improving connectivity performance. With Nyx, SUPCON aims to reduce project development times by up to 50%, while reducing carbon footprint by almost 90%, notably reducing costs for customers. Overall, the company is a market leader in China, with a strong growing presence in the Middle East. Its customer base is allowing the company to drive advances in its solutions, particularly for AI capabilities, with SUPCON forming a joint development team with Aramco to design and build AI solutions.

For Emerson, the full acquisition of AspenTech gives the company the opportunity to redefine and reinforce its offerings to the process manufacturing automation market. AspenTech brings a number of advanced Industry 4.0 solutions to the table, particularly a wide range of AI tools, and with Emerson being able to fully integrate these capabilities into its wider portfolio, this will help position it even more effectively as a next-generation automation provider.