French group in takeover talks with Invensys

TECHNOLOGY firm Invensys looks set to become the latest British company to fall into foreign hands as it confirmed talks over a possible £3.3bn takeover by a French power equipment maker.

The London-based engineering electronics firm said it had received a cash and shares approach from Paris-based Schneider Electric worth 505p a share and revealed it was “likely” to recommend a firm offer at that price.

Schneider’s interest represents the latest attempt to snap up Invensys after it held discussions with US giant Emerson Electric last year, although the talks fizzled out before any firm approach was tabled.

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It has since remained firmly in the takeover spotlight and shares have nearly doubled over the past year, up another 16 per cent yesterday.

Invensys, which employs more than 1,100 people in the UK out of a total global workforce of 16,500, develops technologies for a wide range of sectors including oil refineries and air conditioning and household appliances such as refrigerators.

It is headquartered in London, but has offices in Worthing and Crawley in West Sussex, as well as offices across the United States.

The group works for seven of the top 10 appliance manufacturers, 23 of the top 25 oil giants and 35 of the 50 biggest nuclear power plants.

Schneider said Invensys would be a “compelling” fit for the group and would increase its focus on the industry automation sec- tor.

“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,” added Schneider.

The French firm, which has an operation in Leeds, has until 5pm on August 8 to make a firm offer for Invensys under City takeover rules.

Invensys sold its Wiltshire-headquartered rail division on May 2 to German high speed train maker Siemens for £1.7bn.

The deal enabled Invensys to plug the deficit in its company pension scheme, which had previously been seen as a stumbling block to takeover suitors.

It paid £400m upfront into the pension fund and a further £225m that is held in a trust.

Invensys is also reorganising the business following the rail sale to save £25m a year in costs.

It recently reported a 41 per cent leap in annual operating profits to £131m, but pre-tax profits plunged to £15m from £47m as it was hit by exceptional charges, including restructuring costs.