Schneider Electric Courting Invensys in Mega Deal

With its eyes on marquee brands such as Wonderware, Foxboro, Eurotherm and Robertshaw, Schneider Electric, Paris, is said to be preparing a formal offer for Invensys, a U.K.-based conglomerate of industrial software, automation and control products.

Invensys disclosed on July 12 that Schneider had made an informal offer of £3.3 billion (about $5 billion) for the company. Schneider responded with a release confirming its interest, but saying little else. Schneider now has until close of business Aug. 8 to formally ask Invensys shareholders for the company’s hand. Initial speculation about rival bidders focused on the handful of giants in automation and controls. Emerson Electric, St. Louis, approached Invensys with an offer last year but ultimately walked away. GE, Fairfield, Conn., was considered a likely suitor until Chairman Jeffrey Immelt said Invensys  wasn’t a  good fit for them.

ABB, Zurich, Switzerland, and Honeywell, Morristown, N.J., have also been mentioned. Siemens, Munich, Germany, was also mentioned by some analysts, but some of its lines would overlap  with some of Invensys’ more valuable brands.

The value for Schneider comes from the potential to add substantially to its offerings for the process industries such as oil and chemical refineries, food processing and water treatment. Wonderware alone would give Schneider one of the leading industrial software platforms.

“If Schneider had Wonderware, it would change some of the dynamics on the process side of things,” said Frank Hurtte of River Heights Consulting. “It would give them new products to talk about.  The main thing people pay attention to is the software. That’s the most complicated part. It would be easy to bundle some I/O into the mix that would increase the sale. Some of the Eurotherm stuff would match up well with portions of the PLC (programmable logic controller) business and the Wonderware business.”

If Schneider goes ahead with the acquisition, Hurtte said he will watch how the story plays out for the companies’ distribution partners. In the North American market, Invensys sells Wonderware primarily through a network of specialized distributors, many of which operate under the Wonderware name.

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