Schneider Electric announced that they are in early talks to buy Invensys Plc. The move is to boost its industry automation business that is valued at about 3.3 billion pounds or US$5 billion. Invensys said that the company is likely to recommend Schneider's offer of 505 pence a share. Schneider is set to pay 186 pence for the new Schneider shares and 319 pence in cash.
France's Schneider Electric confirmed the talks after Invensys issued a statement regarding the preliminary offer.
Schneider's said that Invensys had until Aug. 8 to confirm whether it intended to make a firm offer or walk away under UK rules. Schneider announced last summer of plans to step up acquisitions to boost sales and tap into new markets.
Analysts from Societe Generale said in late April that Invensys could be valued at 460 pence a share following the takeover. Invensys announced in May the company plans to return 625 million pounds to shareholders after selling Invensys Rail for 1.74 billion pounds to Siemens.
Schneider announced that the takeover of Invensys could lead to "significant cost savings" and "revenue synergies."
Invensys is a provider of software, systems and controls to clients ranging from oil refineries and power stations to mining companies and appliance manufacturers, to help monitor, control and automate products and processes.
Schneider Electric specializes in automation management electricity distribution, and produces installation components for energy management. Schneider Electric is headquartered in Rueil-Malmaison, France.
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