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Schneider Electric Offers $5 Billion for Invensys

Schneider Electric logoFrance’s Schneider Electric is in talks to buy Britain’s Invensys for $5 billion. Invensys shares rose on the news, but some investors hope for a counterbid, possibly from Emerson Electric, General Electric, or ABB, reports Bloomberg.

Invensys operates in more than 180 countries and employs more than 16,500 people. The energy management and controls software company is known for its widely used Wonderware software. In May, Invensys sold its railroad unit to Germany’s Siemens, making it a more attractive takeover target.

Schneider, meanwhile, has been on an acquisitions role. Frost & Sullivan Industry Manager Konkana Khaund said Schneider has benefitted from a strong line up of acquisitions in the last decade (Square D, T.A.C., Andovar, Kavlico, Lee Technologies, APC, Vizelia, Uniflair, Pelco and Juno Lighting). These acquisitions have boosted its energy management business lines, supported by the company’s StruxureWare software.

“A further boost to these capabilities is inevitable, given Invensys’ strong position in energy monitoring, controls and software,” said Khaund.

Paul Baier, vice president of Sustainability Consulting and Research at Groom Energy Solutions noted that Schneider has also picked up:

  • 2013: SCL Elements, wireless building solutions
  • 2012: M&C Energy Group, procurement and sustainability specialist
  • 2011: Summit Energy, utility bill management, energy management software and procurement.

“While large major rivals such as ABB, Emerson, General Electric, Honeywell, Johnson Controls, Rockwell, and Siemens have also completed software acquisitions, none can keep with the pace set by Schneider Electric,” said Baier. “We think Schneider’s acquisitions are well thought out.”

“The strategic and financial rationale for this transaction, if consummated, is compelling,” said Schneider in a statement, mentioning the “key electro-intensive segments” and “the fast-growing software business for industrial operational efficiency.”

According to the Wall Street Journal, Invensys global client sectors include oil and gas, chemicals, pharmaceutical, nuclear-power, and mining companies with around 38 percent of its $2.7 billion in annual revenue derived from South America, the Asia Pacific region, Africa and the Middle East, while its main market is the US.

Invensys said it disclosed the offer without Schneider’s consent, reports Bloomberg. Schneider has until August 8 to make a firm offer under UK takeover rules; but that deadline could be extended.

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