Schneider Electric is Growing by Acquisitions

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Schneider Electric is Growing by Acquisitions

Schneider Electric is Growing by Acquisitions
Schneider Electric is Growing by Acquisitions | Source

Schneider Electric is Growing by Acquisitions

Acquisition in Brazil

Schneider Electric has acquired companies like Digilink, Zicom and Luminous in India. Schneider Electric has acquired good brands also with the acquisition of these companies. Schneider Electric itself enjoys good brand support all over the world. Schneider Electric SA is planning to acquire Groupe Steck in Brazil. It has agreed to purchase Steck Da Amazonia Industria Electrica, a distributor and maker of low voltage appliances like wiring devices, plugs and circuit breakers for industries and buildings. This company is based in Sao Paulo, the wealthiest city in Brazil. It is expected to produce sales of around € 80 million. Schneider Electric is a French company.

Active role in energy management

Schneider Electric has its branch in India called Schneider Electric India. Balaji Lenka is the Vice President (Retail) and Ms K Rajini is the CFO of Schneider Electric India. Schneider Electric is a € 20 billion company. Schneider Electric has realised that power sector is going to dominate all the businesses in India in the coming decade. With this realisation, it wants to play an active role in energy management in India. Schneider Electric has become a billion dollar company in India. It has made six acquisitions in India so far. It has churned out revenues amounting to Rs.4500 crore in the year 2010. Schneider Electric is not simply using its global products in India. It has realised that this strategy will not work in India. Therefore it is adjusting to the local needs in India depending on circumstances and situations.

From B2B to B2C

Schneider Electric was focusing on B2B market so far in India. It was offering solutions and products to business enterprises to IT sector, hospitals and large housing companies. Now Schneider is foraying into B2C. Schneider Electric is foraying into retail sector with the products manufactured from its production plant in Baroda, Gujarat State. Baroda plant is manufacturing sockets, switches and distribution systems. Now Schneider Electric has entered retail market also in a small way and wants to expand this to a big way. By 2012, Schneider Electric wants to establish a chain of around 4000 retail outlets in important places in India. The retail agents will be trained to book orders by using their smartphones. Schneider Electric has set a sales target of Rs.10000 crore to be achieved by the year 2015 in India.

Full fledged R&D in India

Schneider Electric considers India to be important for its growth strategy. It has established 31 production facilities in India so far. It has 900 engineers in India. It has a full fledged R&D unit in Bangalore, the technological capital of India with 1000 strong members. The R&D team works on global products and the ways and means to localise these products to suit Indian conditions.

Worldwide acquisitions

Schneider Electric SA is utilizing global economic downturn to strengthen its position worldwide through acquisitions. It is acquiring companies in various countries like Hungary, Turkey, Japan, India, South Africa and Australia. In USA and Europe also Schneider Electric is active. In India, the largest acquisition of Schneider Electric was the acquisition of the New Delhi based Luminous Power Technologies. Luminous is one of the well known brands in inverters and batteries. Schneider Electric acquired the Bangalore-based Conzerv Systems, then it acquired Meher Capacitors, then it acquired two units of the Mumbai-based Zicom Electronics Security Systems, then it acquired digilink business of Smartlink Network Systems. Finally Schneider Electric acquired a 75% stake in APW President Systems early this year.

Presence in 100 countries

Schneider Electric has presence in 100 countries. It is a specialist in energy management. It offers integrated solutions across multi market segments. This consists of leadership position in infrastructure and energy, building automation, industrial processes and data centres & networking. It has broad presence even in home applications. The deal to acquire Luminous is put at Rs.1867 crore. The transaction was worth sixteen times the earnings of Luminous last year. The deal will help Schneider Electric to multiply its sales by three times in India to over Rs.4500 crore. The acquisition will place India seventh in terms of sales for Schneider Electric. At present Schneider Electric derives around 3.5% of its global sales turnover from India. Schneider Electric wants India to be one of its top four markets in the world.

Consolidating global leadership

Schneider Electric wants to consolidate global leadership in the IT business. It wants to attain critical turnover in the inverter business in India to catapult itself to the top slot. Luminous will also assist Schneider Electric to make inroads in the inverter market in regions like Africa, Middle East and South-East Asia. Luminous employs 3000 people. Now, with the acquisition of Luminous, the employee strength of Schneider Electric has crossed the 12000 mark. Luminous has even an industrial site in China. Its revenue was at Rs.490 crore in financial year 2011.

Takeover of Tyco International on the cards

Schneider Electric acquired structured cables business from Smartlink Networks. The deal was worth Rs.503 crore. Smartlink produced revenues amounting to Rs.155 crore. Schneider Electric is planning to takeover Tyco International. That move will make Schneider Electric world’s largest producer of security systems. Tyco is based in Schaffhausen, Switzerland. It has a market capitalisation of $22.3 billion as on April this year. Schneider Electric is the largest producer of low and medium voltage equipments in the world. In industrial automation, Schneider Electric ranks second behind the German giant Siemens. In building automation and security, Schneider Electric is fourth behind Siemens, Johnson Controls and Honeywell International.

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