France’s Schneider agrees £3.4bn takeover of Invensys

France's Schneider Electric has agreed a £3.4 billion deal for Invensys in a move that could lead to jobs cuts for UK workers.

The takeover, which was first mooted earlier this month, still needs to be rubber-stamped by shareholders but looks set to succeed after a rival bid for the engineering group failed to emerge. 

Schneider said it hoped to make cost savings of about €140 million (£122 million) a year from the enlarged group, raising the prospect of redundancies across its global workforce, which will include 4600 employees in the UK.

Invensys makes components for oil refineries, power stations and domestic appliances.

The company held takeover talks with US giant Emerson Electric last year and has been named as a prime takeover target since selling its rail division to German high-speed train maker Siemens for £1.7 billion in May.

Its chairman Sir Nigel Rudd — dubbed “the man who sold Britain” because of his role in the sale of a number of British companies including Pilkington and Boots, overseas — said today: “Combined with the disposal of Invensys Rail and return of £625 million to shareholders, this represents a very attractive outcome for Invensys shareholders.

“Furthermore, the members of the Invensys Pension Scheme will benefit from the ongoing support of a significantly larger, leading, global automation business.”

Schneider, which is based on the outskirts of Paris, hopes the deal will help it take on global rivals such as Siemens and Mitsubishi.

The company will offer Invensys staff generous retention packages to stay with the group once the deal is completed.