By Inti Landauro
PARIS--France's Schneider Electric SA (SU.FR) made a preliminary
offer to take over U.K.-based Invensys (ISYS.LN), a competitor in
the growing business of offering energy-management software and
automation to industrial companies, in a bid to shift further from
its traditional business of manufacturing electrical devices.
In a Thursday statement, Invensys said it received a preliminary
offer from Schneider Electric that would value the company at 3.31
billion pounds ($5.03 billion), part of it in cash, part of it in
Schneider shares. The French company has until Aug. 8 to make a
firm offer, Invensys said in the statement.
Schneider offered to pay the equivalent of 505 pence per share.
Invensys shares had closed Thursday at GBP4.40, up nine pence.
Schneider Electric confirmed it has opened talks with Invensys's
board. "Schneider Electric believes that the strategic and
financial rationale for this transaction, if consummated, is
compelling," the company said in a separate statement. The
acquisition will allow it to cut costs and gain market share, the
statement said. Schneider didn't confirm filing a preliminary
offer.
Under the helm of its chief executive, Jean-Pascal Tricoire,
Schneider Electric has shifted from being a manufacturer of
electrical devices such as panel boards, switches and circuit
breakers, as well as automation equipment to an integrated provider
of bundled deals, including gear plus service and software--a
business with narrower profit margins, but less capital
intensive.
The demand for these kinds of packages is particularly strong in
emerging markets where the company has been growing, compared to
sales in mature markets where business has been less predictable
over the past four years. Mr. Tricoire and several top executives
relocated in Hong Kong in 2011 to be closer to the company's
customer bases.
The acquisition would be the first significant one since
Schneider Electric took over software company Telvent in 2011, also
a move into the business of packaged deals.
Write to Inti Landauro at inti.landauro@dowjones.com
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