France's Schneider Electric has snapped up British engineer Invensys for £3.3bn in a bid to boost its industry automation business and gain more energy sector customers.
Schneider confirmed in a statement that the acquisition will strengthen its position in fast growing global industry automation business by helping it shift away from traditional electrical devices production.
Schneider will pay 502 pence per share in cash and stock, which is below the initial proposal of 505 pence per share.
However, the French group said that the cash component is higher at 372 pence versus the original 319 pence.
While UK-based Invensys was trading over 2% higher at 1120 BST in London, Schneider's stock soared over 4% at the same time in Paris.
"We will be able to provide more integrated services to our customers and we will have more opportunities to sell low-voltage devices," company's Chief Financial Officer Emmanuel Babeau said.
When rumours circulated that Schneider was looking to acquire Invensys, analysts believed that it could have sparked a transatlantic bidding war, as the industry is dominated by large rivals.
Invensys produces software that helps to run power stations, oil refineries and chemical plants with 38% of its £1.79bn in annual revenue derived from the South America, the Asia Pacific region, Africa, the Middle East and the US.
Schneider said that it expected the cash earnings per share to be boosted by a low to mid single-digit in 2014 and by a high single digit-percentage in 2016.
Through the acquisition it expects to earn €160m in operational synergies annually by 2016. Company expects the total integration costs to reach around €150m over next two years, with acquisition costs of about €60m and tax savings at around €400m over the first five years.
The company's first half earnings suffered following the credit crisis, low business confidence in France and lower spending by utilities in Germany.
Schneider said its first-half earnings before interest, tax and amortisation (EBITA) fell 2% to €1.53bn.