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Schneider Electric makes $5bn bid to buy Invensys

12 July, 2013

Schneider Electric has launched a $5bn bid to buy the British industrial software and control systems supplier Invensys. Invensys’ board has told Schneider that it is likely to recommend that its shareholders should accept the offer, but there is speculation that other bidders may enter the fray, possibly including Emerson, GE or ABB.

Schneider is offering to pay 505 UK pence for each Invensys share, valuing them at 15% above their closing price on 11 July. The Schneider offer comprises 319p in cash plus 186p in new Schneider shares. Following the news of the bid, the value of Invensys’ shares rose by up 17% while Schneider’s fell by 4.4%.

For many years, there has been speculation about Invensys being taken over by a variety of suitors. This speculation has intensified in recent months after Invensys sold its rail division to Siemens for £1.74bn in May and reduced its pension liabilities, making itself a more attractive takeover target. Since November 2012, when Invensys announced the Siemens deal, its shares have risen in value by 60%.

Invensys currently has four business segments: software; industrial automation; energy controls; and appliance controls. Its software portfolio includes the Wonderware, SimSci-Esscor and Avantis brands. Its automation portfolio focuses on the process sector and includes Foxboro distributed control systems and Triconex emergency shutdown systems.

Invensys also manufactures process controllers and recorders, which it sells under the Eurotherm brand, as well as Eliwell and Ranco controls for refrigeration, heating, ventilation and air-conditioning. Its other activities include the IMServ energy monitoring, visualisation and control business, and the Drayton, Eberle and Robertshaw brands of domestic heating controls.

During its chequered history, Invensys has owned and disposed of many well-known brands including Brook Crompton, Eurotherm Drives (which later became SSD and then Parker SSD), CompAir, Maxam Pneumatics, Crompton Controls, Rexnord, Hansen Transmissions, Lambda, APV and Fasco Motors.

In 2000, there was speculation that Invensys would itself bid for Schneider Electric. In 2005, Schneider bought Invensys’ building controls division.

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