Schneider makes formal offer for Invensys

Schneider Electric has today published its formal offer to acquire the Invensys Group for just over GBP3.3Bn, as previously discussed.

Relevant statements were  published this morning.

Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric, commented:
“We are delighted to announce the combination of Invensys and Schneider Electric in what is an exciting day for the stakeholders of both companies. The addition of Invensys’ businesses will considerably strengthen Schneider Electric’s overall offering to its 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 transaction will allow Schneider Electric to benefit from increased scale and realise substantial synergy benefits from the combination. We believe our offer is compelling to Invensys shareholders who will realise significant value for their holdings while having the opportunity to participate in the future strengths of the combined business. We warmly welcome Invensys’ team and believe that the combined business will provide new and larger growth opportunities for employees and customers as well as offering Schneider Electric’s shareholders significant future value creation.”
Sir Nigel Rudd, Chairman of Invensys, commented:
“Following the recent disposal of Invensys Rail, the agreement with the Pension Trustees and the reorganisation of the Group, the Invensys Directors believe that Invensys is strongly positioned to execute on its growth strategy going forward. However, 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. Combined with the disposal of Invensys Rail and return of £625 million to shareholders, this represents a very attractive result for Invensys Shareholders. Furthermore, the members of the Invensys Pension Scheme will benefit from the ongoing support of a significantly larger, leading, global automation business.”

What happens next?

The press conference highlighted that there has been a lot of contact between Schneider and the Invensys operational management already, in the recent due diligence work. Jean-Pascal Tricoire expressed a lot of appreciation for their knowledge and expertise. He sees the two companies as neighbours, in fact with little overlap of business, but many common customers. Schneider comes from the market sectors in the discrete operational part of industrial processes, whereas Invensys comes primarily from the continuous process side. Schneider supplies the MV and LV power interfaces to the major customers where Invensys supplies the automation. Tricoire therefore sees the match as a meshing, rather than as an acquisition where bits need to be cut out.

However, the formal offer document, now being prepared, will not be distributed until late August or September, and an Invensys EGM to vote on the offer will not be held until Q4, maybe even November 2013: the target for completion would be the end of the calendar year. So there is plenty of time to mull over the proposal, and discuss the joining of the Invensys ArchestrA and InFusion with the Schneider PlantStruxure PES and their use of totally Ethernet communications….

The offer price

The formal offer presented today restates the deal as initially described by Invensys on 11 July, and uses the figures at that date for the Schneider share price and the Euro exchange rate. This results in a total offer price of GBP5.02 per share on the basis of 11 July figures, or GBP5.07 on the basis of 31 July figures for the Schneider share price, and the GBP/Euro exchange rate. Invensys shares in London recovered to GBP5.02 after the Schneider announcement, having fallen off below the £5 mark because of a lack of interest, or news!

Advertisements

One Response

  1. […] Schneider makes formal offer for Invensys (nickdenbow.wordpress.com) […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: