By Bill Lydon, Editor There has been speculation for a long time that the Invensys automaton business would be sold. Now Schneider Electric has made a 3.3 billion pound ($5 billion) takeover proposal for Invensys. This could ignite a bidding competition since it has been rumored in the past that Emerson Electric, Siemens, ABB, and General Electric have had informal discussions with Invensys. Schneider has until August 8 to say whether it intends to make a firm offer or walk away under UK takeover rules.
Schneider Electric announced the PlantStruxure PES (Process Expert System) in February 2013 as, “The innovative Process Automation System that brings together the best from the PLC/SCADA and DCS worlds and combines this with integrated energy management features…” The stickler in this strategy is that Schneider Electric does not have process instruments, process controllers, or a DCS system. Their PLC products are a fit for some process industries but not the chemical, oil & gas, and petrochemical industries. In efforts to grow, virtually all the PLC manufacturers have been creating strategies to pursue the process industries.
By acquiring Invensys, Schneider Electric would certainly be in a better position to support this strategy, particularly with well-known process industry products including Triconex and Foxboro. This acquisition would provide Schneider Electric with avenues to sell more of their electrical products into these process markets. In addition, the acquisition would give Schneider Electric the kind of broad product lines comparable to Siemens and ABB.
The news of the offer is all over the news wires:
• Bloomberg: Schneider Electric Offers $5 Billion for Invensys Takeover • Reuters: Schneider offer fuels talk of $5 billion Invensys bid battle
Frost & Sullivan Comments
Frost & Sullivan Industry Manager Konkana Khaund commented on the news concerning Invensys potential by Schneider Electric. Khaund said, "The recent announcement of a possible takeover of Invensys by Schneider Electric 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 datacenter businesses.”
What does it mean? Invensys as a company was built through a long series of acquisitions including Robertshaw, Barber-Coleman, Eurotherm, Foxboro, Triconex, and Wonderware. Schneider Electric was also built by buying a number of automation companies including Square D, Modicon, and Telemecanique. Integrating companies can be tricky business as we have witnessed over time.
“It ain’t over until the fat lady sings”
It is likely there will be other bidders in a situation like this. The question is, “If Invensys is sold, who wins?” Shareholders, buyers, investment bankers, but what about the customers?
