Schneider Electric and American Power Conversion (APC) have entered into a definitive merger agreement under which Schneider Electric will acquire all outstanding shares of APC for an enterprise value of approximately US$5.5bn (£2.58bn).
APC had approximately US$2bn in sales in 2005 and has enjoyed 12 consecutive quarters of double digit sales growth. APC has 52% of its sales in the US, 30% in Europe and 18% in Asia where it has a strong manufacturing base.
The APC acquisition is expected to result in significant value creation in excess of US$3bn arising from the turnaround in large UPS systems, the strong complementary characteristics with MGE UPS Systems (a subsidiary of Schneider) as well as the synergies with Schneider Electric’s product offering.
The board of directors of APC has recommended its shareholders approve this transaction, which it believes is in the best interest of all its shareholders. Rodger B. Dowdell (chairman of the board of APC) and Neil E. Rasmussen (chief technical officer of APC), who together hold 9.6% of APC shares, have committed to vote in favour of the merger.
This transaction is subject to regulatory approvals and the approval of at least two thirds of APC shares outstanding. The transaction is expected to close in the first quarter of 2007.
