The French electrical equipment group Schneider has agreed to buy American Power Conversion for nearly five billion euros in cash. That is 30% more than Friday’s closing price for the US company’s shares. Schneider Electric is the world’s biggest maker of circuit breakers and APC produces equipment to protect computers and other devices from power surges.
The deal was not well received by investors. Schneider’s shares fell 7.2% because the French company plans to sell 1.2 billion euros worth of new shares to partly fund the purchase, but also because analysts said the timing was not good with US economic growth slowing. But Schneider pointed out APC’s production capacity in Asia, where the US firm currently makes nearly a fifth of its sales.
The deal is part of Schneider’s strategy of moving away from heavy-duty industrial equipment to focus on the faster-growing and more profitable market for sensors, switches and other low-voltage products.