Siemens to acquire Invensys Rail
Posted: 29 November 2012 | | 1 comment
Siemens has entered into an agreement to acquire Invensys Rail, the rail automation business of Invensys…
Siemens has entered into an agreement to acquire Invensys Rail, the rail automation business of Invensys. With revenues of approximately £ 800 million, Invensys Rail is a leading rail signaling and control company. The acquisition will extend Siemens’ presence in the growing global rail automation market. Invensys Rail shall be integrated into Siemens’ Rail Automation Business in the Mobility and Logistics Division of the Infrastructure & Cities Sector.
“With the addition of Invensys Rail we are in an excellent position to offer best-in-class solutions and technology to rail operators worldwide. The combination of two excellent organizations will create a truly global player in the Rail Automation business,” said Sami Atiya, CEO of Siemens’ Mobility and Logistics Division. The transaction is subject to Invensys shareholder approval and regulatory clearances.
“The combination of the regional activities, portfolios and customer offerings of Invensys Rail und Siemens will ensure profitable growth opportunities worldwide,” said Juergen Brandes, CEO of Siemens’ Rail Automation Business. Invensys Rail has a strong footprint and a well established reputation with customers in the UK, Spain, the US and Australia which will extend Siemens’ Rail Automation existing presence in countries such as Germany, Austria, Switzerland as well as China and India. In recent years, Invensys Rail has also successfully expanded its business into fast-growing emerging regions.
The combined Invensys Rail and Siemens product portfolio will offer a full range of automation and optimization products, solutions and services, covering all customer segments. One example is ‘Positive Train Control’ (PTC – a system for monitoring and controlling train movements required by law for all US rail networks) where Invensys Rails’ wayside products complement Siemens’ On-Board Unit.
Furthermore the transaction will strengthen the Siemens Rail Automation core business by combining the innovative portfolio of both worlds: for example in the area of Communication-Based Train Control (CBTC) solutions for metros, that are based on a continuous and bi-directional radiocommunication between wayside and on-board equipment.
The growth outlook of the global rail automation market is driven by increasing urbanization and the demand for enhanced mobility including new and extended mass transit and commuter systems. Overall the rail sector benefits also from trends such as energy efficiency, environmental factors, liberalisation, deregulation and low-cost transportation requirements.
Siemens provides integrated mobility solutions and already has a significant and established rail automation business with revenues of €1.4 billion, employing around 6,500 employees. Invensys Rail shall be integrated into this unit headquartered in Berlin, Germany. Siemens and Invensys Rails’ managers will form the new management team and Invensys Rails’ local expertise and relationships will be retained. The new constellation will combine Invensys regional strengths of both organizations for the benefit of its customers.
The transaction is subject to Invensys shareholder approval which is expected to be voted on at a General Meeting planned for December 2012. Furthermore, consent by Invensys’s lenders, the UK pension regulator and anti-trust authorities is required. Overall Siemens will not take on any significant pension liabilities with the transaction. Siemens expects the transaction to close in the second quarter of calendar year 2013.