Schneider Completes Invensys Acquisition
Schneider Electric announced last month that it has completed its acquisition of Invensys plc, significantly enhancing its position as a provider of efficiency solutions integrating power and automation. The transaction will allow the combined entity to have a unique position in industrial and infrastructure end markets.
"We are delighted to announce the completion of the acquisition of Invensys and warmly welcome the teams joining us," said Jean-Pascal Tricoire, chairman and CEO, Schneider Electric. "With Invensys, Schneider Electric will reinforce its industrial automation capabilities, boost its positions in key energy-intensive segments and strengthen its software offering. Together, we will create substantial value for our customers, shareholders and employees."
The acquisition was driven by the desire to complement Schneider Electric's strengths and to gain Invensys' installed base. "Schneider is pretty much discrete automation-oriented, heavily weighted toward our OEM offering," said Clemens Blum, executive vice-president, Industry Business, Schneider Electric. "The acquisition offered us a strong foothold in the other half of the market—process automation."
A large portion of the process automation market is in existing plants and with loyal specifiers, so along with its product lines, Schneider Electric put a high value on Invensys' customers, Blum said. "If you don't own the installed base, it takes ages to grow, even if you invest heavily in the products."
Basic DCS or PLC functionality is a given, Blum said. "What matters now is the ability to deliver flexibility and efficiency based on real-time information." In this era of merging the operations and IT layers, Invensys also brings strong connections between the plant and C suite. "It gets us into the offices of the CEOs and decision-makers, and gives us a perspective on their priorities and activities," he said. "Giving information to management based on real-time data combined with predictive modeling will bring us to a leading position."
Invensys' brands are well-established and include Foxboro, Triconex, SimSci, Eurotherm and Wonderware. "Details will be decided over time, but we expect to use them long-term as family range names," Blum said. "These brands carry high value and have strong links to the people we're bringing on board." He added, "Invensys' network of system integrators is also an asset we'll strengthen and build on."
The ultimate success of any acquisition or merger depends a lot on how the change is received by employees. "Invensys is a partner that can provide not only domain knowledge that's unique, but also people with expertise and know-how," said Michael Caliel, president of software and industrial automation for Invensys. "The complementary nature of the two companies' technology and business models is extraordinary. The excitement among our people has been tangible."
In meetings of the companies' employees, "We were surprised at how complementary we are in terms of culture and spirit. We like technology, we like engineering, we like innovating things," Blum said. "We've had many deep discussions about technology and customer value, and how we can accelerate our roadmap by putting the best together."
The company's combined strengths are considerable. "It's an opportunity for Schneider customers to enjoy leading-edge capabilities in safety, automation and software, and Invensys' capabilities to execute large projects," said Caliel.
"We're now in a position to offer to both our customers and those of Invensys a unique value proposition in terms of segment know-how, technologies and geographic footprint," Blum said. "This is the largest deal Schneider has done in recent history and also the most important one. If we do this right, we really have the potential to change the industrial automation landscape."