Schneider Electric Seals the Deal with Invensys

In July of 2013, we first learned officially of Schneider Electric’s plan to acquire Invensys. Since that time there has been much speculation as to how the acquisition would unfold and what it would mean for the Invensys brands and technologies that are so well-known in the process and batch industries.

Now that the acquisition has been finalized, I had the opportunity to speak with Clemens Blum, Schneider Electric’s Executive Vice President, Industry Business and Michael Caliel, Invensys’s CEO and President, Software and Industrial Automation.

Explaining the interest Schneider Electric had in acquiring Invensys, a process that began some two years ago, Blum noted five key reasons:

1. Schneider Electric has historically been very OEM-oriented and focused on the discrete automation world. Invensys’s foothold in the process industries provided a means of entry into the process market, which Schneider Electric did not have. While discussing this point, Caliel cited the capabilities Invensys provides from a human resource standpoint in this area. “An experienced workforce with a long-term history in process industry is key,” he said. “It's a very important asset for our future.”

2. A key element of Schneider Electric’s PlantStruxure is DCS functionality. Investing in R&D to develop DCS is one thing, getting business from the process industries without an installed is difficult, Blum said. “Invensys has a significant installed base all over the world in this area.”

3. Invensys will significantly improve Schneider Electric’s execution capability with turnkey automation projects.

4. Blum cited Invenys’s strong brand recognition in the process industries where an “excellent safety reputation” is necessary. He said that Invensys brands such as Foxboro, Triconex, and Wonderware play a major role here.

5. The industry trend around the convergence of operations and IT is extremely important in driving production efficiencies. “Invensys adds a significant portfolio of established offerings and brands here as well,” said Blum.

When asked about product or technology overlaps between the two companies that could lead to consolidation of one product or brand into another, Caliel said that since the merging of the two businesses is still in the early stages, the companies have been limited legally from addressing this in great detail as they went through the closing process. “But it will be one of the first orders of business,” he said.

Caliel did point out, however, that both companies were surprised at the “complementary nature of the technologies and portfolios that the two business have, as well as the complementary nature of the end markets and industry sectors” each business serves.

“We expected to find more overlaps, but it was hard to find any,” said Blum, “even in an area like HMI/SCADA.” He said that as the two companies began discussions about each product and the markets they addressed, the HMI/SCADA products from each company proved to be more complementary than overlapping.

In terms of what the acquisition means for customers, Caliel said “our goal is for the process to be transparent.” He added that early feedback from key global clients have reinforced the positive feelings the companies have internally about the acquisition.

After the companies work through the initial migration process as Invensys approaches its fiscal year end in March, the focus will turn to near-term goals.

“We believe we can accelerate R&D roadmaps using bits and pieces from each company that were missing from the other,” said Blum. “This is a unique deal we’ve done here. The future possibilities for the combined company can really change the industrial landscape.”