Chinese train maker tracks Invensys

State-backed group China South Locomotive is looking at a potential offer for the London-based engineering electronics firm as part of ambitions to expand into Europe.

The interest reignites takeover speculation surrounding Invensys, which recently sent shares plunging after confirming that bid interest from US giant Emerson Electric had come to nothing.

Invensys, which employs 3,000 people in the UK out of a total workforce of 20,000, develops technologies for a wide range of sectors including mass transit rail networks, oil refineries and air conditioning.

It saw its market value soar to £2bn amid the takeover hopes, but shed 17 per cent in one day on the Emerson disappointment.

China South Locomotive already knows Invensys well, having shared a joint venture with the group. The Chinese group claims to be the world’s largest train manufacturer.