Invensys Agrees £3.4bn Takeover Offer from Schneider Electric

France’s Schneider Electric, a manufacturer of equipment for electrical power distribution, has agreed a £3.4bn takeover deal to acquire the UK company Invensys to add software and control systems used by chemicals makers, oil refineries, and mining companies.

“The addition of Invensys’ businesses will considerably strengthen Schneider Electric’s overall offering to its industrial and infrastructure customer base,” Schneider’s chief executive officer (CEO) Jean-Pascal Tricoire said in the statement.

The French group will pay 502 pence a share in cash and stock, 14% above Invensys’ closing price the day before talks between the two firms were disclosed.

Invensys produces software used to operate power stations, oil refineries and chemical plants. The UK has long been regarded as a potential takeover target in an industry dominated by larger rivals. Some analysts had expected Schneider’s interest in Invensys to trigger rival bids from competitors such as Emerson and General Electric.

The purchase represents Schneider’s biggest takeover since its US$6.1bn acquisition of American Power Conversion in 2006.  Earlier this month, credit ratings agency (CRA) Standard & Poor’s said that it might cut Schneider’s A-credit rating as the company takes on more debt to fund part of the acquisition, while  Moody’s Investors Service said that the purchase “would put some pressure” on Schneider’s credit metrics.

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