Schneider Electric, Rueil-Malmaison, France, proved it's dead serious about being a major player for the smart grid with a $2 billion offer to buy Telvent GIT, SA, based in Madrid, Spain.
Telvent has established itself as a force in software for real-time management of mission-critical infrastructure in the electricity, oil and gas, water and transportation sectors. Telvent employs more than 6,000 people worldwide and operates in more than 19 countries. It reported 2010 sales of approximately $1.07 billion.
The consensus among analysts seems to be that Telvent's position in providing software to manage utility power distribution networks was Schneider's primary interest. The deal commits Schneider to pay $40 per share for all public shares of the company, a 36 percent premium over Telvent's three-month trailing average share price. Schneider has the approval of Telvent's board and expects to close the transaction in the third quarter. Engineering and environmental firm Abengoa SA, Seville, Spain, which owns a 40 percent stake in Telvent, has signed an irrevocable agreement to tender its stake.
The addition of Telvent will allow Schneider to offer electrical utility customers a complete substation automation and smart grid software suite comprising DMS (distribution management system); OMS (outage management system); SCADA (supervisory control and data acquisition); MDM (meter data management); and GIS (geographical information system).
Schneider's release highlights several advantages to justify the $2 billion outlay. “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. (Schneider) will also double its overall software development competencies and enhance its IT integration and software service capability, including weather services.”
Schneider also pointed to the two companies' complementary geographic reach, including Telvent's strong position in North America and Latin America.