Invensys secure £1.7bn Siemens deal
International technology firm Invensys has announced a £1.7bn deal with German company Siemens, for the sale of its South West-based rail unit.
Situated in Chippenham, Invensys’ rail division makes signalling systems that will be absorbed into Siemens rail automation business.
Shareholders will be given £625m cash, which amounts to 76 pence per share, while the firm said the deal would allow it to pay £400m into its pension scheme, with an additional £225m to be put into a trust.
The firm hopes issues with pension deficits will be resolved by these payments, while the £225m to the Reservoir Trust hope to halt its deficit payments of £40-47m a year.
Shareholders will be informed with the deal’s details, and they will have the final say to approve the transaction.
Wayne Edmunds, chief executive of Invensys, said: “Following a strategic review which highlighted the likely consolidation in the global rail signalling market and the limited scope to increase the size of the Invensys Rail business, we have decided to refocus the Group around our industrial software, systems and control equipment business and, accordingly, to dispose of Invensys Rail.
“Invensys Rail has made significant strategic progress over the last five years and this is reflected in the disposal price of £1.7 billion, which we believe delivers attractive value for our Shareholders and also reflects Siemens’s ability to maximise the division’s potential.
“This transaction creates a more focused industrial software, systems and control equipment Group with a significant exposure to higher growth and higher margin segments and the resources to invest in them. It also allows us to make substantial cost savings through a simplified organisational structure.”
Invensys reported a 2% rise in operating profits in its half year results earlier in November, up to £102m for the six months up to 30th September, while completion of the deal announced on Thursday is expected during the second quarter of 2013.