industrial companies which have traditionally grown through

increasing their global footprint, larger workforces;

very much focussed on infrastructure. Now they're needing to transform and change

themselves and engage in acquiring technology

that they have not been able to build internally.

Technology is affecting everyone. Every company is trying to make their businesses

more efficient. In a sense, everybody's changing their business

models. Therefore, traditional businesses may no longer

exist.

So, the manufacturing industry has evolved. Part of the nature of how you evolve is you

adopt the latest technologies. The traditional manufacturing industry is

still the traditional manufacturing industry, in that it's making widgets but it's using

software to make those widgets more efficient.

M&A is a very important part of Emerson and our culture.

It's always much faster to acquire the company because that company brings the expertise

of that particular technology.

A lot of the industrial companies are very much focussed

on how do they acquire technology to either add into their own existing infrastructure

and therefore increase potential market share or they're buying technology so that it can

be a disruptor in the market.

I think the US is still the biggest source of disruptors.

Some ideas are coming out of places like Europe, Germany or Japan

but not in the magnitude we've been seeing in the US.

We're seeing two types of deals. On the one extreme you've got the mega deals,

the billion-dollar plus deals. On the other end of the spectrum we're seeing

much smaller, more technology-play deals where

industrials are requiring a small piece of technology,

an IP, a software, or they are buying a workforce so they're buying the people, the innovators.

That's resulted very much in a slowdown I think in the mid-market.

Finding those good middle-market companies are really an

advantageous method to grow and improve your customer solutions

and your financial contributions.

They're more impacted by what's going on in the economy,

and the ambiguity of the markets because they're more hesitant

I think, to put themselves up for sale than the smaller companies who may need the

cash, like the start-ups. There may be a view that middle market companies

are losing out but I think there are great opportunities for

M&A.

The pace of due diligence and hence the pace of M&A

has increased very, very significantly. There may be significant risk going forward

in terms of M&A business.

What we will see if a longer time period for deals to get done

and an increased focus on how you navigate the complexity of regulation.

But I still think, M&A, tech, industrials, that's where my money's at.