Schneider Electric is to buy British engineer Invensys for an agreed £3.4bn to boost its industrial automation and energy offerings.
The French said today it would pay 502p a share in cash and stock, 14 per cent above Invensys' closing price the day before talks between the two firms were disclosed – just below an initial proposal of 505p a share, although the cash component is higher at 372p versus the original 319p.
Schneider, which has been hit by a faltering world economy and weak European markets in particular, is hoping that buying Invensys will boost its position in the fast-growing, global industrial automation business.
Invensys produces software that helps to run power stations, oil refineries and chemical plants, though its rail technology division was taken over by German engineering giant Siemens in April after the deal was cleared by The EU's competition watchdog.
The British firm has long been touted as a takeover target in an industry dominated by larger rivals and some analysts had speculated Schneider's interest could prompt rival bids from firms like Emerson and General Electric. However, analysts had also said Schneider was offering a good price.
Based in the outskirts of Paris, Schneider Electric makes equipment for electrical power distribution and for industrial control and automation, selling products to the construction, electric power, industrial, and infrastructure markets.