Schneider Electric in talks to acquire Invensys

Proposed $5 billion deal could position company against rivals in industrial, building, and data center markets

07/12/2013


Schneider Electric is in talks to acquire Invensys for a reported $5 billion. The deal, if successful, would enhance Schneider's position in the industrial, building, and data center markets. Courtesy: Schneider ElectricAn industry analyst said July 12 that the proposed acquisition of Invensys by Schneider Electric would create a more powerful industrial automation company while enhancing Schneider Electric’s position in the commercial and residential building automation markets.

Frost & Sullivan Industry Manager Konkana Khaund said the acquisition, reported to be a $5 billion deal, "Could lead to some significant implication on competitive strategy maximization and diversification for Schneider Electric. The immediate industry focus is high on evaluating the outcome on the industrial business of Schneider Electric, which would be the prime beneficiary from such an acquisition, given Invensys’ core competencies in this area. But it is hard to ignore the imminent implications this could have on Schneider Electric’s buildings, residential and data center businesses.”

Invensys is based in London, so the early discussions have centered on how U.K regulators might view the proposed deal. Bloomberg.com reported that Emerson, the St. Louis-based technology company which had previously pondered a deal for Invensys, also may look to make a counter-offer.

Officials of Paris-based Schneider Electric confirmed their interest in Invensys in a press release issued July 7, saying it is “in the early stages of discussions with the Board of Directors of Invensys.

“Schneider Electric believes that the strategic and financial rationale for this transaction, if consummated, is compelling,” company officials said in the release. “Schneider Electric is considering making an offer for Invensys in order to increase its focus on the attractive industry automation sector. The enlarged group would significantly expand its access to key electro-intensive segments where Schneider Electric offers leading low and medium voltage as well as energy management solutions. It would also gain a leading position in the fast-growing software business for industrial operational efficiency.

“Schneider Electric takes a disciplined approach to acquisitions with clearly defined strategic and financial criteria,” the company went on to say.

That matches with the company’s current strengths, noted Khaund, from F&S. “The buildings and residential energy management business lines are expected to gain further impetus from the company strategic repositioning efforts to be recognized as a global leader in energy management, security, high performance buildings, smart homes and smart cities,” Khaund said.

Another benefit for Schneider Electric could be its emergence in the expanding data center market, driven by the rush toward cloud computing. “The combined portfolio will eventually be optimized by Schneider Electric to potentially strengthen its offering in the datacenter business, particularly software solutions geared towards infrastructure and building operation level supervision, control and monitoring,” Khaund said. “The company’s underlying interest in lighting and energy/temperature controls, an area that has been in focus through targeted acquisitions, but not fully maximized to its potential, could be a major winner. The market share line-up of this segment that Schneider Electric has conspicuously remained out of, but one that is fiercely dominated by some of the company’s major competitors, could witness some healthy competitive reorganization.”

Speculation about the proposed acquisition of Invensys has centered on Schneider Electric’s desire to position itself against larger industry rivals. The Wall Street Journal mentioned Siemens, Rockwell Automation, and Mitsubishi Electric among the key rivals in this space.

Other major automation companies not mentioned here include ABB, Eaton, Honeywell, and Yokogawa, among others. 

 

- Bob Vavra, CFE Media, Plant Engineering, Control Engineering, Consulting-Specifying Engineer.



ESMOND , Non-US/Not Applicable, Singapore, 07/17/13 02:28 AM:

I believe this acquisition will put Schneider in a better market position vs Rockwell and Siemens, as Schneider doesn't has a strong HMI product and the manufacturing solution e.g MES comparing with the others two organizations. Additional benefit for Schneider is the F&B industry. Wonderware has the largest market shares compare to the other players. Giving to the high-end solution, DCS and safety product will gives Schneider a stronger power to competing with players like ABB, Honeywell, Emerson and Yokogawa.
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me