29.11.12
Siemens buys Invensys rail division for £1.74bn
Invensys has sold its rail business to its competitor Siemens for £1.74bn.
The shock sale came after a failed takeover earlier this year by Emerson Electric. Siemens and Invensys have been working together recently to provide signalling for Crossrail.
Shares for the division closed up at 27% at 280p on Wednesday night.
Invensys plans to return £625m to shareholders through a special dividend, with another £400m to plug the company’s pension scheme deficit and £250m to be held in a pension reserve. The rail business took operating profits of £116m last year.
The company is to continue trading in other areas.
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.
“As well as providing shareholders with an immediate cash return, this transaction enables the Group to create a long term pension solution and therefore increased financial flexibility going forward.”
Roland Busch, CEO of Siemens Infrastructure & Cities, said yesterday: “Today's moves are important measures to focus our core activities. We are exiting a non-core business with limited synergy potential while strengthening a resilient and high return business by combining two organisations with similar cultures and attractive synergy potential. The combined business will ensure profitable growth opportunities worldwide for the Siemens Infrastructure & Cities Sector.”
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