Invensys agrees £3.4bn takeover by Schneider

Jean-Pascal Tricoire, Schneider Electric's president and CEO. Picture: AFP/Getty
Jean-Pascal Tricoire, Schneider Electric's president and CEO. Picture: AFP/Getty
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INDUSTRIAL software firm ­Invensys has agreed a £3.4 billion takeover by France’s Schneider Electric, with the suitor seeking to retain top talent via wide-ranging “golden handcuffs” agreements.

Schneider revealed it planned a £4 million retention bonus pool for senior Invensys corporate employees worth up to 150 per cent of salary to encourage staff to stay with the group following the takeover.

Senior staff, excluding board directors, will also pick up special awards worth up to 200 per cent of salary over a three-year period. The French group added that it was looking at an additional retention bonus scheme for the wider workforce.

The deal, which must be approved by shareholders, will bring together 16,000 employees at Invensys and Schneider’s 140,000 staff, including a combined UK workforce of more than 4,600.

Schneider already has more than 3,500 employees across 15 sites in the UK, including Coventry and Telford. Invensys employs more than 1,100 in the UK and has offices in Worthing and Crawley in West Sussex, as well as sites in the United States.

Sir Nigel Rudd, chairman of Invensys, said there was a “strong strategic fit” between the two companies, adding that the cash and shares offer was a “very ­attractive outcome” for shareholders.

Jean-Pascal Tricoire, chairman and chief executive of Schneider, said it was an “exciting day” for both companies. “We warmly welcome Invensys’s team and believe that the combined business will provide new and larger growth opportunities for employees and customers,” he said.

However, Schneider warned of possible job losses as it revealed plans for cost savings of about €140m (£122m) a year.

It said there was potential to cut overlap in corporate and support functions, while it also signalled plans to offload non-core divisions within Invensys, including putting its appliance arm under review.

Invensys develops technologies for a wide range of sectors including oil refineries, air conditioning and household appliances.

Schneider is paying 502p-a-share in cash and stock, a 14 per cent premium to the UK firm’s closing price the day before talks were confirmed.

It held takeover discussions with US giant Emerson Electric last year, although the talks fizzled out before any firm approach was tabled.

The company has since remained in the takeover spotlight and shares have nearly doubled over the past year. Invensys shares closed up 5.5p at 496.3p.

Rudd recently brushed aside concerns over another UK firm falling into foreign ownership. He told shareholders at the Invensys annual meeting last week that it was “not a British company”, given that 95 per cent of its sales are overseas and most of its key operations are in America.

Invensys paved the way for a takeover after selling its rail division on 2 May to German train manufacturer Siemens for £1.7bn. The deal enabled Invensys to plug the deficit in its company pension scheme, paying £400m upfront into the pension fund and a further £225m that is held in a trust.