Schneider Bids for Telvent in Purchase Valued at $2 Billion

Schneider Bids for Telvent in Purchase Valued at $2 Billion

June 1 (Bloomberg) -- Schneider Electric SA, the world’s biggest maker of low- and medium-voltage equipment, agreed to buy Spain’s Telvent GIT SA for about 1.4 billion euros ($2 billion) to double its software development capacity.

Shareholders of Madrid-based Telvent will receive $40 a share under the terms of the offer, the French company, based near Paris, said in a statement today. The offer is 16 percent higher than Telvent’s closing price yesterday on the Nasdaq exchange. Abengoa SA has agreed to tender its 40 percent stake.

Telvent extends Schneider’s move into software and real- time monitors to help manage power grids and other infrastructure efficiently, joining peers like ABB Ltd. After holding preliminary talks with Tyco International Ltd., Schneider Chief Executive Officer Jean-Pascal Tricoire has said in recent weeks he prefers small- and mid-sized targets.

“By acquiring Telvent, Schneider Electric will integrate a high value-added software platform that presents a good fit with its own range in field device control and operation management software for the smart grid and efficient infrastructures,” the company said in a statement.

ABB’s $1 billion acquisition of Ventyx last year marked its expansion in industrial software as the Swiss company seeks out higher-margin markets. It followed that deal with a May 9 agreement to acquire private equity-owned Mincom to add clients in the energy and mining industries.

For Schneider, the planned Telvent takeover is the second deal in three days. On May 30, it announced plans to buy 74 percent of Luminous Power Technologies Pvt. Ltd, an Indian maker of inverters and power-storage systems, for about 215 million euros.

Telvent is expected to add to earnings per share in the first year, excluding implementation costs. The company will pay for the acquisition using its own cash.

The tender offer is set to start by mid-June, with closure in the third quarter. The plan has been approved by the board of Telvent. The transactions need approval from European and U.S. competition authorities.

source: businessweek.com