Siemens to acquire rail automation unit of Invensys for $2.78 bn

Siemens AG, Europe's biggest engineering firm yesterday said that it would acquire Invensys Rail, the rail automation unit of British engineering and software company Invensys Plc for £1.74 billion ($2.78 billion) in order to strengthen its signalling business.

The deal will give Siemens a 17-per cent market share in the rail signalling market, almost double that of its nearest rivals Alstom of France and Italy's Ansaldo STS. 

The acquisition is the largest for Siemens after it purchased Dade Behring in 2007 for more than $7 billion.

The Munich-based company will also divest its baggage handling, postal and parcel sorting business.

Both transactions are part of Siemens' recently launched "Siemens 2014" company programme, which is aimed at strengthening the company's core activities.

Invensy, whose business includes manufacturing rail signalling and industrial automation systems, has since early this year been in talks with potential suitors, including Siemens, GE and Emerson Electric on selling itself wholly or some parts of itself.