Rumoured to be the target for many buy-outs over the last year, Britain’s industrial automation specialist Invensys has finally been bought after French firm Schneider Electric announced it had paid £3.4bn for it.
Invensys had been the subject of rumoured interest from industry giants that included Emerson, Honeywell, Siemens and General Electric, but it is the French industrial giant that has secured the industrial automation firm. In November of last year, Invensys sold its rail division to Siemens for £1.74bn.
The UK is a specialist in industrial automation; with a particular focus providing software that help run oil refineries, power stations and chemical plants. Schneider is thought to be keen to expand its operations in this area so that it is able to compete with global giants like Siemens AG, Mitsubishi Electric, and Rockwell Automation.
Announcing the deal, Schneider CEO Jean-Pascal Tricoire, who said: “The addition of Invensys’ businesses will considerably strengthen Schneider Electric’s overall offering to is industrial and infrastructure customer base, reinforcing us as a global leader in energy management solutions integrating power and automation, as well as leading software for customer efficiency.”
The deal is seen as attractive to Schneider, which will gain a strong performing automation specialist, and it follows a trend for the company in buying up other industrial power management companies. Industry analysts Verdantix said after the deal was announced: “To date Schneider Electric’s major acquisitions in the industrial power management market segment have been BEI Technologies, a US-based supplier of customized sensors and encoders, for $562m in July 2005; and China-based Leader & Harvest for $650m a supplier of medium voltage variable speed drives, bought in June 2011. Schneider Electric also acquired Invensys Advanced Building Systems, for $150m in June 2005. There are a number of synergies between Invensys and Schneider Electric’s industrial business, which generated €3.5bn in revenues in 2012.”
Verdantix add: “Not only will Schneider Electric acquire Invensys software applications, and automation and control product line, it will also gain invaluable chemical, oil and gas and pharmaceutical domain expertise – essential when offering energy services – and the opportunity to sell its existing products and services to Invensys customers.
Invensys Chairman Sir Nigel Rudd said he enthusiastic about the potential of the new partnership: “The Invensys Directors believe that the offer from Schneider Electric represents an attractive value for Invensys shareholders and reflects the future growth prospects of the business and a significant proportion of the benefits which are expected to accrue from the strong strategic fit between Invensys and Schneider Electric.”