Henri Lachmann, Chairman of the Supervisory Board

Henri Lachmann, Chairman of the Supervisory Board

I have been digesting the news from earlier today that Schneider Electric has put in a $5 billion bid for Invensys. I’m a bit surprised at the timing, but not shocked at the bid.

I thought maybe Invensys was positioning for a break up, with Foxboro/Triconex going to Emerson and maybe the software business spun off. But the company no doubt prefers a single sale.

Schneider no doubt is looking longingly at its European rival, ABB, which bills itself as the “power and automation” company. The two overlap in markets a little on the power side. Schneider essentially has no process automation.  Its discrete (factory) automation business has been treated like the proverbial orphan child. Do you remember when Modicon was a force in factory automation? And, does anyone remember Citect–the software business it acquired years ago?

Almost all the press releases emanating from US marketing deal with energy issues and products. Very little on automation. Nothing on software. Of course, after Schneider acquired APC that company’s marketing team became the Schneider North Americas marketing team. I suppose they promote what they know.

Who knows, maybe Emerson’s David Farr will take the bait cast by the Invensys board and raise the ante. I doubt it, but I’m not an M&A genius.

Maybe Schneider has been benchmarking Siemens. That company had a poor record of integrating acquired companies. It has done a much better job lately. The UGS integration into Siemens PLM has been great.

Maybe Schneider can integrate Foxboro and Wonderware without killing them off. We can only hope.

A statement on the Schneider Website offers hope:

Schneider Electric believes that the strategic and financial rationale for this transaction, if consummated, is compelling. 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.
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